AnnuAl RepoRt 2010 - ASX · 2010-11-04 · ANNUAL Repo R t 2010 AnnuAl RepoRt 2010 • purpose •...

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AnnuAl RepoRt 2010

• purpose • resolve • strength • fortitude

Determination knows no limits

ABN 65 067 682 928

UXC LimitedF

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UXC Corporate Directory

UXC LimitedABN 65 067 682 928

ACN 067 682 928

Directors

Executive Chairman

Geoffrey Lord

Non-Executive Directors

Geoffrey CosgriffKingsley CulleyJean-Marie SimartRon Zammit

Management Executives

Glenn Fielding Chief Executive Officer, Professional Solutions Group

Mark Hubbard Finance Director / Company Secretary

Cris Nicolli Chief Executive Officer, Business Solutions Group

Ralph Pickering Director, Mergers, Acquisitions and Investments

Michael Waymark Chief Executive Officer, Field Solutions Group

Registered OfficeLevel 3, 350 Collins Street Melbourne Vic 3000

GPO Box 4386 Melbourne Vic 3001

Telephone + 61 3 9224 5777 Facsimile + 61 3 9224 5778 Internet www.uxc.com.au

Share RegistryLink Market Services Level 4, 333 Collins Street Melbourne Vic 3000

Telephone 1300 554 474 Internet www.linkmarketservices.com.au

AuditorsDeloitte Touche Tohmatsu

SolicitorsFreehills

BankersNational Australia Bank

Stock ExchangeThe Company is listed on the Australian Stock Exchange (ASX).

UXC – A top three provider of choice for Business and ICT Solutions

* Australian owned

Source: Gartner IT Services Asia/Pacific Market Share, consulting services, May 2010

Rank Name Market share

1 IBM 11.0%2 Accenture 8.7%3 UXC* 6.5%4 CSC 5.2%5 PriceWaterhouseCoopers 4.8%6 KPMG International 4.0%7 Ernst & Young 3.8%8 Hewlett-Packard 3.1%9 Oakton* 3.0%

10 SMS Management & Technology* 2.7%11 Salmat 2.5%12 Deloitte 2.4%13 Fujitsu 1.4%14 Mincom 1.3%15 SAP 1.3%

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Highlightsu Revenue from Continuing Operations up 8% to $686 million

Total Revenue up 5% to $748 million

u EBITDAC from Continuing Operations up 24% to $50.6 million

Total EBITDAC down 60% to $20.2 million

u NPAT from Continuing Operations up 153% to $18.6 million

Total NPAT down >100% to ($2.9) million

u EPS from Continuing Operations up 112% to 6.52 cents per share

Total EPS down >100% to (1.01) cps

u Cash up 28% to $37.8 million

u Cash Flow from Operations up 78% to $28 million

u Net Debt down 32% to $39 million – the lowest balance at a reporting date since December 2006

u Record Performance from UXC IT businesses – revenue up 4% to $474 million; EBITDAC up 31% to $43 million

u Results attributable to members have been adversely affected by Discontinued Operations – several lines of business are now closed due to major issues in the environmental area of the Field Solutions Group, including the collapse of the market price for Renewable Energy Certificates, the cancellation and/or abrupt revision of several government programs in the environmental sector, and the consequent down-sizing of supporting facilities and infrastructure. No further exposure to these discontinued business activities exists going forward.

u The conduct of a formal process of Strategic Review to examine alternatives to unlock greater shareholder value for the Company. This process is continuing. Shareholders will be advised of progress as and when:

● The board considers potential transactions to be in the best interest of shareholders and stakeholders;

● Such potential transactions progress to binding offers.

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2 UXC Limited 2010 Annual Report

Highlights ............................................................................................................................ 1

Our Vision ............................................................................................................................ 3

Letter from the Executive Chairman ..................................................................................... 4

UXC Structure ..................................................................................................................... 6

UXC Brands ........................................................................................................................ 7

Business Units Business & Professional Solutions Group .................................................... 8

Business Units Field Solutions Group ................................................................................ 11

Review of Operations and Activities ................................................................................... 12

Board of Directors ............................................................................................................. 14

Directors’ Report ............................................................................................................... 15

Auditor’s Independence Declaration .................................................................................. 35

Corporate Governance Statement ..................................................................................... 36

Consolidated Income Statement ....................................................................................... 42

Consolidated Statement of Comprehensive Income .......................................................... 43

Consolidated Statement of Financial Position .................................................................... 44

Consolidated Statement of Changes in Equity ................................................................... 45

Consolidated Statement of Cash Flows ............................................................................. 46

Notes to the Financial Statements ..................................................................................... 47

Directors’ Declaration ........................................................................................................ 81

Independent Auditor’s Report ............................................................................................ 82

ASX Additional Information ............................................................................................... 83

Note Index ......................................................................................................................... 84

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Our VisiOnu To be the premier independent solutions group servicing medium to large entities in the

public and private sectors across Australia and New Zealand.

u To be the investment of choice in the ASX IT Sector.

Our FOcusBusiness Solutions Group and Professional Solutions Groupu Providing ICT solutions in management and IT consulting, software and systems

integration, business applications, infrastructure and technical services to industry and governments.

Field Solutions Groupu Providing outsourced infrastructure and environmental solutions to utilities and

government.

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For the financial year ending 30 June 2010, UXC has reported the results of its activities in two components in accordance with the accounting standards – continuing operations and discontinued operations. Discontinued operations relate to business activities primarily in the environmental sector that have now been terminated. Continuing operations relate to the business activities that will continue to be carried out during the 2011 financial year, and include all of the Business and Professional Solutions Groups and the remaining activities in the Field Solutions Group.

Continuing OperationsWe have reported an improvement in consolidated earnings and earnings per share from continuing operations over the previous year, and we have succeeded in realizing our plans in the majority of our businesses. The UXC headline numbers are positive: revenue up 8% to $686 million, NPAT up 153% to $20.5 million (before net of tax impairments to goodwill and capitalized development costs of $1.9 million relating to the development of electronic shelf labels [$0.7m FY09]), and EPS up 112% to 6.52 cents per share.

Within continuing operations, the Business and Professional Solutions Groups have reported record earnings on record revenue. Together, as the Information Technology businesses of UXC, they have posted impressive EBITDA earnings improvements of 31% from the prior year, on revenue growth of 4%.

Field Solutions Group revenue of $212m increased by 19% over the previous corresponding period, though EBITDA decreased by 9%. The year closed on a significant order book of some $255 million.

In addition to closing the loss making activities in the Field Solutions Group, we have won new contracts and established new activities to act as growth drivers, including important contracts with Energy Australia, Integral Energy, Ergon Energy, Country Energy and the NSW Department of Environment, Climate Change and Water.

We now have a significant role to play in two of the three advanced metering infrastructure (AMI) smart meter contracts awarded to date. We are pleased to have become the market leader in this area in such a short time, and believe it will position us strongly for such work in other states when undertaken.

Discontinued OperationsDespite these achievements, discontinued operations have contributed substantial losses in the Field Solutions Group, primarily in relation to federal government programs previously carried out in the environmental sector. These losses and charges are sufficiently large during this year to have offset our profits from continuing operations. Such programs have now been discontinued and present us with no further exposure.

The underlying causes of such losses are complex and varied. They include rapidly changing market conditions and declining commodity prices in the Renewable Energy markets; unilateral and abrupt changes to government policy and the funding of programs in the environmental space; and changes to the cost base resulting from rapidly expanding then diminishing business activities.

■ Market conditions, renewable energy –The market price for renewable energy certificates (REC) dropped significantly during the first half, from highs in the mid $50s to lows in the high $20s per REC. Sales of RECs subsidised our solar hot water installation activities. As such, within

“ Business and Professional Solutions Groups have reported record earnings on record revenue.”

Melbourne, Victoria 31 August 2010

Dear Fellow Shareholders,

Letter from the Executive ChairmanF

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our solar hot water business this impacted both volumes (as lower REC prices equated to higher consumer prices thereby reducing demand) and margins (as customer quotes were underpriced relative to the realisability of REC sales). This was exacerbated by the government’s continual reduction of solar subsidies. Ultimately, this business activity has been discontinued, which has further added costs of closure.

■ Government Policy – Large start-up costs were incurred on the government’s Green Loans program in the first half, and then difficulties surrounding the administration of the program by the federal government resulted in changes being made to the program that rendered it uneconomic. Additionally, rebates available on the government’s home insulation and solar programs were abruptly cut, and the quoting mechanism on the insulation program was also changed after commencement of the program. As a result, UXC’s insulation activities became economically unsustainable, and were closed in the first half after the incurrence of start up costs not recovered.

■ Cost Base – The cancellation of these and other programs resulted in challenges to reduce fixed overheads now unable to be absorbed through loss of volume. Investments were made in infrastructure to support a much larger business, and this was wound back during the second half.

The combined effect is that aggregate losses and charges of $21.5 million after tax have been reported as discontinued operations within the Field Solutions Group. As well as continuing

reductions in the cost base, we have taken action to eliminate any further exposure through cessation of such activities. We have a new management team running the business unit and its remaining environmental activities, and we have invested in new systems for our continuing businesses.

CashClosing cash of $37.8 million is up 28%, and cash flow from operations was up 78% above the prior year to $28 million. Net debt is down 32% to $39 million, being the lowest balance at a reporting date since December 2006. Net debt is now less than one times budgeted EBITDA for FY11, and our interest cover will be in excess of 6 times in FY11 based on budgeted figures.

OutlookOur outlook for FY11 is much improved. We have set budgets indicating growth and strong improvement in all of our business units. Our start to the year has broadly been in line with budget. We have experienced a strong order intake, and we anticipate further contract win announcements soon. We are changing the cost base and our approach to activities in the environmental sector, and the anticipated cessation of losses from discontinued operations in itself will contribute greatly to an improved performance.

Strategic ReviewWe have pursued the strategic review announced in February with great energy and dedication. We have taken a strong stance in our view of the value of our business. Despite the problems encountered with our discontinued operations, the underlying business is sound. If this value can be recognized without a transaction, that remains an option for us. The approach we have taken to the strategic review has not lent itself to a quick result, but we are determined to provide the best result for our shareholders. Discussions continue with three parties, and shareholders will be advised of further progress as and when:

■ The board considers potential transactions to be in the best interest of shareholders and stakeholders;

■ Such potential transactions progress to binding offers.

Geoff Lord Executive Chairman

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UXC Structure

UXC Board

Geoffrey Lord Executive Chairman

Geoffrey Cosgriff Non-Executive Director

Kingsley Culley Non-Executive Director

Jean-Marie Simart Non-Executive Director

UXC Executive Management

Team

Ron Zammit Non-Executive Director




Cris Nicolli Chief Executive Officer, Business and Professional Solutions Group

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UXC Brands

Business and Professional Solutions Group

Field Solutions Group

Consulting

Applications

Infrastructure

PROFESSIONALSOLUTIONS

INFORMATIONMANAGEMENT

RETAILSOLUTIONS

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Business Units Business & Professional Solutions Group

Eclipse ERP, CRM, BI and CPM Eclipse is the leading provider of Microsoft Business Solutions in the Asia Pacific Region, and has been a Microsoft Gold Partner since 2001. With over 800 clients and offices across Australia, New Zealand and the Pacific, Eclipse is the foremost supplier of all its solutions, achieving international recognition for its project delivery and on-going services across; ERP (Microsoft Dynamics, SunSystems), CRM (Pivotal, Microsoft CRM), People Management (PayGlobal) and Business Intelligence & Corporate Performance Management (Microsoft BI and Performance Point). Eclipse also provides vertical industry solutions to meet unique business requirements all delivered on the Microsoft Dynamics platform.

Website: www.eclipsecomputing.com.au

UXC Applications DevelopmentEnterprise Application DevelopmentNow combined with and under the management of Eclipse, UXC Applications Development provides enterprise application software development, testing, life cycle support and consulting services. UXC Applications Development offers industry leading capability in bespoke application design and development using Service Orientation and Web Services, utilising J2EE and Microsoft .Net technologies. UXC Applications Development has an outstanding record of customer satisfaction and impactful large-scale project deliverables, especially within the Government sector.

Advanced Financial Management Solutions Now combined with and under the management of Eclipse, QSP offers financial management solutions via its proprietary e5 product, a Tier One product highly recognised throughout a variety of industries including aviation, transport and logistics and most especially within the Australian and New Zealand Central Governments.

Website: www.qsp.com.au

UXC Performance ManagementPerformance Management and Business Intelligence SolutionsNow combined with and under the management of Eclipse, UXCPM can provide all encompassing solutions leveraging all major vendor products including Business Objects, Cognos, Microsoft, Oracle, SAS and other leading and specialist vendors. Solutions cover data warehousing, data conversions and migrations, business intelligence and performance management. Services offered include strategy, solution design and build, ongoing application support and sustainment.

Website: www.uxcpm.com.au

Gibson Quai – AAS Telecommunications Consulting Gibson Quai-AAS (GQ-AAS) is Australia’s largest specialist telecommunications and information technology consulting company. GQ-AAS offers a complete range of strategic business and technology consulting services including strategies, procurement, engineering planning and design, project management, benchmarking, and performance improvement. GQ-AAS provides consulting advice to blue chip clients in the corporate, government, carrier, regulation and investment sectors. In addition, Gibson Quai-AAS offers market research and analysis capability services through its Telsyte Business Unit.

Websites: www.gqaas.com.au and www.telsyte.com.au

Integ Group Communications and Data Networks, Call Centre Applications Integ Group is Australia’s leading integrator of secure communications and data networks, contact centre applications and cabling solutions to government and business. Integ Group offers hosted, managed and customer premise solution partnering with key vendors such as Alcatel-Lucent, Cisco, Juniper, F5, Genesys and HigherGround. Integ Group comprises two companies Integ Communications and C4 Systems.

Website: www.integgroup.com.au

Lucid IT IT Management Consulting and Training Provider Lucid IT is Australia’s leading IT management best practices consulting and education provider; offering specialist skills in ITIL, Prince2, MSP, COBIT, ISO 20000, ISO 27000.

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Oxygen Business Solutions SAP Solutions Oxygen Business Solutions is the leading specialist SAP solutions company across Australia and New Zealand, offering a true end-to-end systems and application service for large enterprises. The solutions offering spans application hosting and remote support, along with a full range of SAP consulting and implementation services including OxygenExpress that combines award-winning SAP software and hardware to manage and deliver fast, lean, purpose designed SAP implementations for mid-sized companies – real SAP, real fast.

Website: www.oxygenforbusiness.com

Planpower Project Advice, Delivery and Education Planpower, together with the Australian College of Project Management (ACPM), is the leading specialist supplier of project management advice, delivery and education in Australia. Advice includes project health checks, remediation & PMO establishment. Delivery spans project teams through to specialist Program Director, BA and Change roles to supplement client teams. The ACPM trains 3000+ people p.a., including Public and Corporate: Certificate IV; Diploma; and Advanced Diploma of Project Management Programs.

Websites: www.planpower.com.au and www.projectmanagement.edu.au

Red Rock Consulting (incorporating Jigsaw Services)

Oracle, JD Edwards, PeopleSoft and SQL Server ConsultancyRed Rock Consulting is the largest independent Oracle, JD Edwards and PeopleSoft consulting and support organisation, and the largest Microsoft SQL Service support organisation, in Australia and New Zealand. Red Rock Consulting provides a complete service continuum encompassing sales, planning, design, implementation, project management and support. Red Rock is very much solution focused around: Oracle Applications, Oracle Technology, SOA, Strategic License Services, MS SQL Server, Business Intelligence and Hyperion Enterprise Performance Management solutions. Red Rock Consulting now incorporates Jigsaw Services, the largest provider of JD Edwards capability in Australia and New Zealand.

Website: www.redrock.net.au

UXC Connect Managed Workspace and Unified Communications UXC Connect is the leading independent provider of managed workspace, ICT optimisation and unified communications solutions. Over 400 staff assist organisations to improve team performance and productivity through the design, implementation and support of unified communications and integrated desktop environments. Key vendor partnerships include Cisco and Microsoft.

Website: www.uxcconnect.com.au

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UXC Information Management INFORMATIONMANAGEMENT

Information Management, Information Intelligence, Integration and Collaboration Services UXC Information Management is a newly formed entity that combines the businesses of BCT Group and Opticon.

Website: www.uxcinfomanagement.com.au

BCT GroupUXC Information Management (formerly BCT Group) provides a wide range of software and services in relation to integration solutions, information intelligence, collaboration and security. UXC IM’s team of experienced architects and consultants have a proven track record in delivering solutions specifically incorporating master data management, data analytics, enterprise search, entity extraction and analysis, portal integration, services oriented architecture and security solutions.

Website: www.uxc.com.au

OpticonUXC Information Management (formerly Opticon) is an Information Management (IM) consultancy providing value-based IM and IT strategic advice and IM implementation services to a range of market sectors. Specialty areas include records management, enterprise content management, online services, and change management associated with large systems implementations. UXC IM is also extensively involved in guiding clients through the ICT sourcing cycle of requirements definition, tender preparation and evaluation, solution selection and implementation.

Website: www.opticon.biz

UXC DefenceDefence Aligned ICT Services and SolutionsUXC Defence delivers specialist ICT services and solutions to the Department of Defence. Solutions utilise the ICT solution experience and capability across our UXC business units and are custom developed for Defence projects and requirements.

Website: www.uxc.com.au

XSI Data Solutions Storage Solutions Integrator For over 22 years XSI has provided state of the art storage solutions encompassing tape libraries, disk storage, infrastructure hardware, storage management software and services. A client-focused approach, geared to companies needing technically advanced and innovative solutions for their storage needs. Key partnerships include EMC, NetApp, HDS Symantec and Commvault.

Website: www.xsi.com.au

UXC Professional Solutions PROFESSIONALSOLUTIONS

UXC Professional Solutions provides a broad range of services to large Australian enterprises and Government, with particular focus on assisting clients to optimise the benefits of their ICT investment through effective programme management, commercial services, planning and quality assurance. Services include management consulting, software and systems integration, and technical services focused on maximising clients overall business and ICT efficiency.

Website: www.ingena.com.au

Business Units Business & Professional Solutions Group

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Fieldforce Fieldforce is a leading Australian supplier of utility services, carbon abatement and carbon offset creation, energy and water conservation, electrical and gas metering and data management solutions to major utilities across Australia. Through the Enviro Saver Brand, Fieldforce provides consumers with Solar PV, Home Health Energy Checks and Saving Solutions.

Website: www.fieldforce.net.au

Utility Asset Management UAM is a leading provider of specialist services to Utility and Energy Organisations, Government Departments, Councils, and major blue chip Australian companies. UAM provide Data Management and Analysis, Data Warehousing, Works Management and Spatial Data Consulting, Asset Inspection, Condition Monitoring, Pole Reinstatement, Design and Survey, Electrical Construction, New Connections, Emergency Response and Technical Consulting.

Website: www.utilityasset.com.au

Skilltech Skilltech is the market leader in metering in Australia. Skilltech provides meter reading, meter installation and meter services for various Gas, Water and Electricity Authorities throughout Australia. Established in 1991, Skilltech has seen strong growth, servicing long-term contracts nationwide. Skilltech is one of the largest metering providers in Australia, reading over 25 million meters and replacing over 100,000 meters per annum. Skilltech has been successful in securing major contracts for Advanced Metering Infrastructure (Smart Metering) and provides turnkey consulting, deployment, communications and data management services.

Website: www.skilltech.com.au

UXC Engineering Solutions

UXC Engineering Solutions provides consulting and implementation services to the Utility Sector. Our solutions extend from smart grid technologies to advanced operational network management technologies; critical infrastructure security, electrical engineering and applications for metered energy consumption, billing and asset management for the Australian electricity water and gas markets.

Website: www.uxcengineeringsolutions.com.au

Infrastructure Constructions Infrastructure Constructions (IC) is a leading service provider to the underground civil construction sector. IC specialise in a wide range of underground techniques including horizontal trenchless operations using the latest trenchless technology, offering minimal disruption to the environment. IC specialises in all types of ground conditions and varying distances and bore diameters. In addition, directional drilling we provide, open excavation, pit installation, low-pressure sewerage, cable hauling and project management to an extensive clientele of asset owners.

Website: www.infracon.com.au

UXC Retail Solutions RETAILSOLUTIONS

UXC Retail Solutions provides your business with a single point of contact for all your equipment servicing needs, from preventative maintenance 24/7. UXC Retail Solutions also provide Electronic Shelf Labels which enables real-time wireless updating of Shelf edge information in all Retail, Warehousing Hardware and Pharmacy applications. ILID ESL technology combines secure, dependable communications with low-cost simple information and our systems integration.

Websites: www.morganfm.com.au and www.ilid.com.au

Business Units Field Solutions Group

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Review of Operations and Activities

UXC operates through individually branded Business Units, providing a diversified portfolio of specialised businesses, products and services. The businesses are organised into two separate operating divisions – the Business and Professional Solutions Group and the Field Solutions Group. Business Units use their proven management capability, in conjunction with the financial strength, commercial backing and centralised control framework of UXC, to achieve goals of delivering strong growth, improved operational performance, brand recognition and quality customer solutions, whilst contributing to UXC’s overall success.

The Group EBITDA contribution by segment, and other detail, is as follows:

30 June 2010 30 June 2009Earnings

$000Revenue

$000Earnings

$000Revenue

$000

ICT ACTIVITIES (BSG & PSG) $43,037 $473,727 $32,941 $455,816

FIELD SOLUTIONS GROUP $7,604 $212,478 $8,388 $179,300

Eliminations / Unallocated -$705 -$519 $2,814

Revenue from Continuing Operations $685,500 $637,930

Revenue from Discontinued Operations $62,793 $77,157

$748,293 $715,087

EBITDAC1 from Continuing Operations $50,641 $40,810

Corporate -$7,490 -$6,718

EBITDA $43,151 $34,092

Depreciation & Amortisation -$11,953 -$10,572

Net Borrowing Costs -$7,982 -$7,977

PBT $23,216 $15,543

Impairments net of tax -$1,905 -$4,973

Income Tax Expense -$2,712 -$3,205

NPAT from Continuing Operations $18,599 $7,365

Net Profit / (Loss) from Discontinued Operations -$21,471 $6,512

NPAT attributable to members -$2,872 $13,877

1. EBITDA plus Corporate

Business and Professional Solutions GroupsThe Business and Professional Solutions Groups (BPSG) of UXC provides market-leading Information, Communication and Technology (ICT) solutions and services to medium and large corporates and governments across Australia and New Zealand. The group goes to market focusing on key customer requirements and specialised capabilities such as management and IT consulting, technical services, software and systems integration, ERP and other core applications, infrastructure and support services.

BPSG revenue of $474m for the year represents 4% growth over the prior year, though EBITDA grew by 31% to $43m (or by an underlying 16% to $38.3m when excluding the gain on sale of a business activity realised in the first half). Underlying EBITDA margin of 8% is a 13% improvement from the prior year.

These results and improvements continue to be based on the strong customer service ethic, the management of core costs and the winning of new and exciting customer contracts such as with Fosters, PSN, the Department of Defence, Queensland Health, MediBank Private, Melbourne Water, Tomago, Canadian firms Thompson River, Tech and others. The pipeline continues to be strong, with some very big opportunities being discussed.

As customers experience the UXC service capability, especially in our vertical solutions, we have been encouraged to expand into North America and we have opened an office in Canada primarily servicing the Resources sector. This has provided us with new opportunities and to date progress has exceeded expectations.

BPSG has grown over the past 5 years from a niche IT business with narrow capabilities to now being recognised as the largest of the “locally” owned IT services business in Australia and New Zealand and one of the top 3 IT consulting based organisations in Australia. This has been achieved by a focus on growing the portfolio of services offered by the group and establishing a breadth and depth of capability in key segments of the IT market. This in turn has enabled the achievement of market leading positions in such offerings as Microsoft Business Solutions, Oracle, SAP, and CPM. Coupled with a flexible, customer-centric approach, the group has now built a formidable revenue stream and an outstanding customer base. The group has improved its attractiveness as a service supplier to medium to large corporate and government organisations in Australia and New Zealand, which is being recognized through the increasing number and size of customer engagements.

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Field Solutions GroupThe Field Solutions Group (FSG) is an ‘asset partner’ to water, gas and electricity utilities, providing a broad range of services in asset and data management, capital works and maintenance. FSG is the market leader in metering and meter reading, data management, asset inspection and consumer-based environmental programs. FSG conducts business through long-term annuity contracts with major utilities, providing a significant element of diversity and certainty to UXC’s overall earnings.

FSG revenue from continuing operations of $212m increased by 19% over the previous corresponding period, though EBITDA from continuing operations decreased by 9%. This was due to loss contracts in the fixed project area that do not qualify for treatment as discontinued operations. Nonetheless, this area of the business is being wound down.

FSG reported a loss from discontinued operations of $21.5m as discussed in the Letter from the Executive Chairman.

In order to rebuild the business after withdrawing from many environmental solutions activities and businesses, FSG will focus on five pillars for strategic growth:

■ Retaining and securing long-term annuity contracts with blue chip clients in the utility sector;

■ Continued focus on improved safety performance to achieve best practice;

■ Strengthen business unit management, reduce staff attrition and implement employer of choice initiatives;

■ Better utilisation of assets, growth in return on assets and less reliance on asset intensive business;

■ Implementation of more robust business processes to further reduce the cost base and support business growth.

FSG’s leading position in the AMI Smart Meter sector will provide continuing growth prospects. Some $84m of contract wins by FSG have been announced since April, bringing orders on hand to just over $255m at 30 June 2010.

Corporate The Group’s track record in its operating performance, financial strength and returns to shareholders is summarised in the following table:

Financial Year Ending 30 June 2010 2009 2008 2007 2006Revenue ($’000) $748,293 $715,087 $611,571 $456,943 $300,704Normalised NPAT ($’000)* $20,504 $18,850 $26,481 $24,524 $16,595Reported NPAT ($’000) ($2,872) $13,877 $24,650 $24,524 $16,595Operating Cash Flow ($’000) $27,956 $15,712 $32,644 $22,696 $12,708Closing Cash ($’000) $37,758 $29,511 $48,219 $29,598 $19,733Total Assets ($’000) $447,351 $453,238 $430,089 $343,403 $236,444Shareholders’ Equity ($’000) $193,275 $191,268 $161,170 $148,795 $112,642Available Franking Credits ($’000) $8,600 $14,900 $16,700 $17,900 $18,000Basic EPS (cents per share)* 6.52 3.07 13.84 13.73 10.03Dividend (cents per share)# - 7.65 9.75 9.00 6.50Dividend Payout Ratio (%)* - 86% 70% 66% 65%Return on Assets (%)* 4.7% 4.2% 6.2% 7.1% 7.1%Return on Equity (%)* 10.8% 9.9% 16.4% 16.5% 14.7%Gearing Ratio (%) 20.2% 30.2% 35.3% 27.4% 12.7%

* FY08: before impairment of investments FY09: from Continuing Operations, before impairment of investments and non-current assets, redundancy and restructuring costs FY10: from Continuing Operations, before impairment of non-current assets

# Includes notional value of Bonus Options interim distribution FY09

UXC’s net debt stands at $39m at 30 June 2010, a reduction of 32% from the prior year. Interest cover from Continuing Operations remains strong at over 5 times, and the gearing ratio (measured as net debt divided by equity) has reduced to 20.2%. Gross debt reduced by $31.3 million since December 2009. This was assisted by the exercise of bonus options during the second half that contributed some $9.7m.

Cash flow was strong despite the substantial loss from discontinued operations, with second half cash flow of $36.1m again much stronger than the first half.

The development and commercialization of electronic shelf labels within the ILID business unit continues to be behind expectation. As a result, an assessment has been made regarding the recoverability of capitalised development costs and goodwill and an impairment write-off of $2.3m was made in the second half.

UXC operated within its banking covenants for the year.

Dividend policy will be to continue to pay fully franked dividends in line with performance, without committing to a target dividend payout ratio.

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Geoffrey LordExecutive Chairman

Aged 65 – B. Eco (Hons), MBA (Distinction), ASSA FAICD

Appointed Director and Chairman on 13 September 2002. Over 38 years experience in business management.

Chairman and Chief Executive Officer of Belgravia Group.

Chairman of LCM Litigation Fund (formerly Australian Litigation Fund), Terrain Capital Limited and Melbourne Victory Limited.

Deputy Chairman of Institute of Drug Technology Limited.

Director of Ausmelt Limited, KLM Group, The MAC Services Group, MaxiTrans Industries Limited and Northern Energy Corporation Limited.

Special ResponsibilitiesExecutive Chairman

Directorships of other Listed CompaniesAusmelt Ltd [Since 2001], Institute of Drug Technology Ltd [Since 1998], KLM Group [2006 - 2009], MaxiTrans Industries Ltd [Since 2000], Northern Energy Corporation Ltd [Since 2007]

Geoffrey CosgriffNon-Executive Director

Aged 57 – BAppSc (Elec), CP Eng, FAICD, FIE Australia

Appointed Director on 13 September 2002.

Managing Director of MITS from 1990 to 2000.

Non-Executive Director of Transurban Group since 2000.

Executive Director of Logica Australia Pty Ltd from 2000 until 30 June 2008.

Council Member of Leadership Victoria

Director of Infocos Pty Ltd since 1990.

Special ResponsibilitiesChairman of Nominations & Remuneration Committee; Member of Audit Committee

Directorships of other Listed CompaniesTransurban Group [Since 2000]

Kingsley Culley OAMNon-Executive Director

Aged 68 – MBA, BEng (Hons), Dip Mech Eng, FIE Australia, FAICD


Engineer with over 20 years experience in senior management.

Former Chairman of Port of Melbourne Authority, Former Chairman of Pacific Hydro Ltd.

Former Director of Docklands Authority, former Director of South East Water Ltd.

Former CEO of Melbourne and Metropolitan Board of Works (MMBW).

Special ResponsibilitiesChairman of Risk Management Committee; Member of Nominations & Remuneration and Audit Committees

Jean-Marie SimartNon-Executive Director

Aged 64 – Appointed Director on 10 August 2001.

Former Senior Country Officer with Bank Indosuez in Saudi Arabia, South Korea, Japan and Australia (1980-1996).

Former Chairman of the French Advisors Association to the French Government in South Korea, Japan and Australia.

Former Chairman of Foreign Banks Association of Japan.

Former Director of Jamieson Investment Fund.

Former Regional Head of Private Banking for Asia and member of the Bank’s Regional Management Board (1996-1998).

Special ResponsibilitiesChairman of Audit Committee; Member of Nominations & Remuneration Committee and Risk Management Committees

Ron ZammitNon-Executive Director

Aged 58 – DIP ELEC/COMS ENG, MACS, FAICD


Over 30 years experience in management.

Former Chief Operating Officer of Logica Australia Pty Ltd.

Special ResponsibilitiesMember of Risk Management Committee

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Directors’ Report

The Directors present their report together with the financial statements of UXC Limited (‘the Company’) and the consolidated financial statements of the consolidated entity (‘UXC’), being the Company and its subsidiaries, for the year ended 30 June 2010 and the auditor’s report thereon.

DirectorsThe Directors of the Company in office during the financial year and up to the date of this report are:

■ Geoffrey Lord (Executive Chairman)

■ Geoffrey Cosgriff

■ Kingsley Culley

■ Jean-Marie Simart

■ Ron Zammit

Principal ActivitiesDuring the year the principal activity of the consolidated entity was the provision of business solutions in information, communication and technology and field services in the areas of asset management and environmental services in the utilities sector.

Review of Operations and ActivitiesRefer to Letter from The Executive Chairman and Review of Operations.

Company SecretaryMark Hubbard Chartered Accountant, aged 51, joined UXC Limited in September 2002 and is also Finance Director. Was previously Executive Director/Company Secretary of DVT Holdings Limited from August 2001. A Chartered Accountant with Deloitte in Denver and Sydney, has also served as CFO/Company Secretary with Mase Westpac Australia Limited, Spectrum Network Systems (now PowerTel), and AIDC Metals Limited. Mr Hubbard holds a degree of Bachelor of Science Business (Accounting) Cum Laude from the University of Colorado School of Business and Administration, and holds a Certified Public Accountant qualification from the USA. He is also a member of the Australian Institute of Company Directors.

Directors’ MeetingsThe following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member). During the financial year, fifteen Board meetings, eleven Audit Committee meetings, eight Nominations and Remuneration Committee meetings and two Risk Management Committee meetings were held.

Directors’ Meetings

Audit Committee

Meetings

Nominations and Remuneration

Committee Meetings

Risk Management

Committee Meetings

Meetings held 15 11 8 2

Director

Geoffrey Lord 15 - - -

Geoffrey Cosgriff 15 11 8 -

Kingsley Culley 12 10 8 2

Jean-Marie Simart 15 11 8 2

Ron Zammit 14 - - 2

All Directors were eligible to attend all meetings held.

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DividendsDetails of dividends in respect of the current year and prior year are as follows:

2010 $000

2009 $000

Fully franked final dividend of 3.50 cents per share paid on 20 November 2009 8,884

Fully franked final dividend of 5.50 cents per share paid on 21 November 2008 10,718

8,884 10,718

In addition, an interim distribution consisting of a 1 for 10 Bonus Option with an exercise price of $0.45 was issued pro-rata to shareholders pursuant to a Prospectus dated 27 March 2009. The notional value of that dividend, based on the closing UXC share price on 26 August 2009 of $0.865 was 4.15 cents per share.

A dividend has not been declared for the year ended 30 June 2010.

Share CapitalDuring the financial year 79,107,964 UXC ordinary shares (UXC ORD) were issued for a value of $26,552,000, taking the balance at 30 June 2010 to $164,015,000 (295,600,519 ordinary shares). Additionally, 17,336,416 UXC Ingena Performance shares (UXC IPS) with a value of $9,448,000 were reclassified into UXC ORD taking the balance of UXC IPS at 30 June 2010 to $5,513,000 (10,189,199 ordinary shares).

Details of issues in share capital are as follows:

Number 000 $000

UXC

Opening balance 216,492 137,533

Shares issued during the year

Bonus Issue of Shares on a 1 for 10 basis 27,679 -

Exercise of Bonus Options 22,705 9,707

UXC IPS shares reclassified to UXC 17,337 9,448

Consideration for acquisitions 9,697 6,312

Dividend Reinvestment Plan 899 755

Share based payments 704 330

Exercise of options 87 -

Net movement 79,108 26,552

Less transaction costs (70)

Closing balance UXC 295,600 164,015

UXC IPS (note 1)

Opening balance 27,526 14,961

Shares issued during the year

UXC IPS shares reclassified to UXC (17,337) (9,448)

Closing balance UXC IPS 10,189 5,513

Total Share Capital 305,789 169,528

Note 1

UXC IPS shares are unquoted shares in UXC ranking equally in all respects with ordinary UXC shares, except that UXC IPS shares may be entitled to additional UXC shares if Ingena achieves certain profit targets at June 2009 and June 2010 as set out in UXC’s Bidder’s Statement for the acquisition of Ingena Group Limited dated 12 November 2008. No further UXC shares will be issued in respect of the 2010 profit target. All remaining UXC IPS will be reclassified to UXC on 30 September 2010.

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Shares Under Option Un-issued ordinary shares of UXC Limited under option pursuant to the terms of the UXC Incentive Plan at the date of this report are 4,498,051 with exercise prices ranging from nil to $2.88 and a weighted average of $0.52 and with expiry dates from 27 September 2010 to 29 October 2012. A total of 86,983 ordinary shares of UXC Limited were issued during the year ended 30 June 2010 on the exercise of options at a zero exercise price being options issued as a component of consideration for the purchase of Oxygen. A total of 10,746,772 options and performance rights lapsed during the year with exercise prices ranging from $nil to $2.88. No amounts are unpaid on any shares.

Directors’ Share and Option HoldingsThe following table discloses options over un-issued ordinary shares of the Company granted during or subsequent to the end of the financial year to Directors, ordinary shares held by Directors at the date of this report, and options held by Directors at the date of this report.

Issuing Entity

Options Granted1

Total Options

Held

Total Ordinary

Shares Held

Directors 2010

Geoffrey Lord UXC Limited 1,529,506 - 18,400,110

Geoffrey Cosgriff UXC Limited - - 4,531,704

Kingsley Culley UXC Limited - - 1,771,108

Jean-Marie Simart UXC Limited - - 497,443

Ron Zammit UXC Limited - - 3,501,416

Issuing Entity

Options Granted1

Total Options

Held

Total Ordinary

Shares Held

Directors 2009

Geoffrey Lord UXC Limited 1,450,091 2,850,091 14,572,905

Geoffrey Cosgriff UXC Limited 379,437 379,437 3,818,365

Kingsley Culley UXC Limited 144,191 144,191 1,465,907

Jean-Marie Simart UXC Limited 38,929 38,929 413,292

Ron Zammit UXC Limited 306,187 306,187 3,085,865

1 Options issued are pursuant to the Prospectus dated 27 March 2009 for an offer, at no cost to shareholders, of one Bonus Option for every ten shares held on the record date of 14 April 2009. None of this pro-rata securities distribution to all shareholders was issued to executives as a component of remuneration.

Subsequent EventsThere has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

Likely DevelopmentsDisclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this information has not been disclosed in this report, other than in relation to the ongoing strategic review of the Company being conducted by the board. This is discussed in the Letter from the Executive Chairman accompanying this report.

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Environmental RegulationsThe consolidated entity is not subject to any particular or significant environmental regulations in respect of its operations. The consolidated entity has assessed its relevant greenhouse gas emissions and energy consumption as being below the 2010 reporting thresholds under the National Greenhouse and Energy Reporting Act 2007.

State of AffairsThe Directors are not aware of any significant change in the state of affairs of the consolidated entity that occurred during the financial year other than as reported in this annual report.

Remuneration ReportInformation about the remuneration of directors and senior executives is set out in the remuneration report on pages 19 to 34 of this Directors’ Report.

Insurance of Officers and AuditorsDuring the financial year the Company paid insurance premiums in respect of Directors’ and officers’ liability insurance. The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the consolidated entity. In accordance with section 300(9) of the Corporations Act 2001, further details have not been disclosed due to the confidentiality provisions of the insurance agreement.

The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

Non-Audit ServicesThe directors are satisfied that the provision of non-audit services, during the year, by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 30 to the full financial statements.

Auditor’s Independence DeclarationThe auditor’s independence declaration is included on page 35.

Rounding of Amounts to Nearest Thousand DollarsThe Company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities & Investments Commission, relating to the ‘rounding off’ of amounts in the Directors’ report and financial report. Amounts in the Directors’ report and financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

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Remuneration Report (audited)This report outlines the policies of the Board of Directors of UXC Limited in relation to the remuneration of the Company’s directors and senior executives. It enables investors to understand:

■ The costs and benefits associated with UXC’s remuneration policies

■ The link between remuneration paid to Directors and executives and the Company’s performance

■ Further information associated with the named company executives receiving the highest remuneration this financial year and key management personnel who have the greatest authority and responsibility for planning, directing and controlling the activities of UXC Limited.

The disclosures in this report have been prepared in compliance with section 300A of the Corporations Act 2001 (Cth). Where applicable, employee benefits and share-based payments have been calculated in accordance with AASB 119: Employee Benefits and AASB 2: Share-based Payments.

The Directors of UXC Limited during the year were:

Executive Chairman Geoffrey Lord

Non-Executive Directors Geoffrey Cosgriff Kingsley Culley Jean-Marie Simart Ron Zammit

The five highest remunerated executives of UXC Limited (company and consolidated entity) during the year were:

Executive Management Cris Nicolli – CEO Business Solutions Group Michael Waymark – CEO Field Solutions Group Paul Fielding – CEO Professional Solutions Group Ralph Pickering – Director, Mergers and Acquisitions and Investments Mark Hubbard – Finance Director/Company Secretary

There are five categories under which employee benefits and share benefits are paid and these are reflected in the remuneration tables which follow.

Company PerformanceThe table set out below shows the consolidated entity’s performance over the last five financial years, in terms of key performance indicators.

Financial Year Ending 30 June 2010 2009 2008 2007 2006

Revenue ($'000) $748,293 $715,087 $611,571 $456,943 $300,704

NPAT ($’000) ($2,872) $13,877 $24,650 $24,524 $16,595

Share price at start of year $0.465 $0.975 $2.50 $1.00 $0.77

Share price at end of year $0.45 $0.465 $0.975 $2.50 $1.00

Interim dividend (cents per share) 2 0.00¢4 4.15¢1 4.25¢ 3.50¢ 2.50¢

Final dividend (cents per share) 2,3 0.00¢ 3.50¢ 5.50¢ 5.50¢ 4.00¢

Total dividend (cents per share) 0.00¢ 7.65¢ 9.75¢ 9.00¢ 6.50¢

Basic EPS (cents per share):

■ from continuing operations 6.52¢ 3.07¢ 12.88¢ 13.73¢ 10.03¢

■ from continuing and discontinued operations (1.01)¢ 5.79¢ 12.88¢ 13.73¢ 10.03¢

1 FY 2009 notional value of the pro-rata 1 for 10 Bonus Options issue at $0.45, based on the closing UXC share price at 26 August 2009 of $0.865.

2 Dividends franked to 100% at 30% corporate income tax rate.

3 Final dividends declared after the financial year end and not reflected in the financial statements.

4 1 for 10 bonus issue of shares declared in lieu of cash dividend.

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Nominations and Remuneration CommitteeThe current members of the Nominations and Remuneration Committee are Mr Geoffrey Cosgriff (Chairman), Mr Kingsley Culley, and Mr Jean-Marie Simart. The Chairperson of the Committee is appointed by the Board at the beginning of each financial year and may not be the Chairperson of the Board. The Committee met eight times during the 2010 financial year.

UXC Limited’s Nominations and Remuneration Committee advises the Board on remuneration practices and policies which are fair and responsible, by recognising the correlation between executive performance targets and reward, to provide the best value to shareholders. In doing so, the Committee reviews and makes recommendations to the Board regarding the remuneration of the Directors, the Chief Executive Officer, and the direct reports of the Chief Executive Officer. The Nominations and Remuneration Committee periodically engages independent, external consultants to independently advise and assess the remuneration of the Executive Chairman, executive management and non-executive Directors. To this extent, performance incentives are available to all executives in various forms, including cash or equity entitlements.

The Nominations and Remuneration Committee has a Charter which outlines the terms of reference under which the Committee operates. It is available online at www.uxc.com.au.

Remuneration PolicyThe overarching tenets of the UXC Remuneration Policy are to meet the following objectives:

■ Ensure the Company can attract and retain high calibre executives who will create value for shareholders and who will support the Board Charter;

■ Fairly and responsibly reward executives having regard to:• the performance of the Company,• the performance of the executive, and• the general pay environment;

■ Ensure a correlation between executive rewards and shareholder value;

■ Differentiate individual rewards commensurate with contribution to overall results and according to responsibility, performance and potential; and

■ Provide incentive to executives to meet challenging performance targets.

Remuneration of Non-Executive DirectorsRemuneration Components

Non-executive Directors’ fees are reviewed periodically and determined by the Nominations and Remuneration Committee and the Board based on advice from external advisors and with reference to fees paid to other non-executive Directors of similar companies. Non-executive Directors’ fees are within the maximum aggregate limit agreed to by shareholders at a General Meeting, and are commensurate with the amount of time which non-executive Directors spend on UXC matters.

Non-executive Directors receive an annual fee of $60,000 plus superannuation for being a director of the Company. Additionally, an annual fee of $12,500 is paid for being appointed as Chairman of a Board Sub-committee and $7,500 is paid for being a member of a Board Sub-committee, in recognition of the further responsibilities and work load involved.

Equity

In the current financial year, no equity entitlements have been made to any Non-executive Director. There is currently no plan available for the Non-executive Directors to receive remuneration in equity.

Retirement Benefits

Consistent with Australian Securities Exchange (ASX) Corporate Governance Rules which states that Non-executive Directors should not be provided with retirement benefits other than statutory superannuation, UXC does not provide retirement benefits to its Directors.

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Executive Chairman’s RemunerationRemuneration Components

UXC Limited’s Nominations and Remuneration Committee advises the Board on remuneration practices and policies which are fair and responsible and recognise the correlation between executive performance targets and reward, to provide the best value to shareholders. An independent consultant is engaged from time to time to assist the Committee in relation to developing its recommendations to the Board regarding the remuneration components available to Mr Geoffrey Lord, Executive Chairman.

Mr Lord receives remuneration comprising cash and benefits in recognition of his significant role and responsibilities as the Company’s Chairman, and receives remuneration comprising cash, equity entitlements and benefits in recognition of his significant role and responsibilities as the Chief Executive Officer. The Nominations and Remuneration Committee and the Board are satisfied that Mr Lord’s remuneration is an appropriate reward in relation to the marketplace and his ongoing contribution to the Company’s development and performance. The Board are also satisfied the remuneration is reasonable for the purposes of section 211(1)(b) of the Corporations Act 2001 (Cth).

Mr Lord received remuneration of $465,000 for the current financial year, comprising cash and benefits on a total employment cost to the Company basis. Of this amount, $135,000 is payable as Director’s fees in recognition of his role and responsibilities as Chairman of UXC Limited.

Additionally, Mr Lord serves the Company as its Chief Executive Officer, and remuneration of $330,000 is paid for these duties. This compensation takes into consideration the time Mr Lord devotes to the business of UXC, as he allocates his time to his various business interests. A further amount of up to $160,000 of short term performance incentive was available to Mr Lord for the current financial year, as detailed below, none of which was earned or paid. A further amount of up to $500,000 of long term performance incentive was available to Mr Lord for the three years commencing in 2008, as detailed below. Of this, $166,667 vested through achievement of performance conditions during FY08 and is now due to be paid. The remaining balance was elected to be taken as equity based compensation pursuant to shareholder approval at the Annual General Meeting in November 2009. These have lapsed during FY10 through non-achievement of performance conditions. Retirement benefits are provided to Mr Lord through his private company.

Performance Incentives

The performance incentive component of Mr Lord’s remuneration is subject to the achievement of key performance indicators. Independent assessment of performance by the Nominations and Remuneration Committee against the KPI’s resulted in none of these entitlements vesting. The KPI’s for the short term incentive (STI) and long term incentive (LTI) and their achievement are as follows:

Available Earned Forfeited

STI - KPI

Budgeted Earnings:

■ UXC Group (adjusted for acquisitions) $16,000 - $16,000

■ UXC Group (original budget) $16,000 - $16,000

Targeted Price Earnings Ratio $32,000 - $32,000

Targeted EPS $48,000 - $48,000

Targeted Total Shareholder Return $48,000 - $48,000

TOTAL $160,000 - $160,000

LTI - KPI

Implementation of succession plan for Field Solutions Group:

■ Target Date 30 June 2008 $166,667 $166,667 -

Implementation of succession plan for UXC Limited

■ Target Date 30 June 2010 $166,667 - $166,667

Implementation of a targeted strategic acquisition

■ Target Date 30 June 2010 $166,666 - $166,666

TOTAL $500,000 $166,667 $333,333

The LTIs vested are payable subsequent to 30 June 2010.

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Equity

Upon achievement of the key performance indicators, Mr Lord is entitled to receive either cash or equity compensation. For his fiscal year 2010 STI entitlements and for the as then unvested portion of his three year LTI entitlements, Mr Lord has elected to receive equity based compensation in the form of performance rights. Additionally, Mr Lord is entitled to salary sacrifice a portion of his compensation for his role as Chief Executive Officer for equity entitlements. Mr Lord elected to accept an offer to participate in the deferred payment share acquisition plan pursuant to the terms and conditions of the Employee Share Scheme to receive shares in lieu of the entirety of cash compensation otherwise payable during FY10, as approved by shareholders at the Annual General Meeting held in November 2010.

Mr Lord is the largest shareholder of UXC. He works from the offices of his private company as well as from the offices of UXC. No charge is levied on UXC for the costs of occupancy, telecommunications, administrative support, and other miscellaneous expenses incurred by Mr Lord in the fulfilment of his duties on behalf of UXC. The Company has not entered into a formal employment agreement with Mr Lord, however, at the commencement of each year, the Company enters into a written agreement covering Mr Lord’s remuneration, incentives and targets for that year. The Nominations and Remuneration Committee and the UXC Board are satisfied that Mr Lord’s compensation is appropriate in relation to the marketplace and structured in such a manner as to continue to motivate his ongoing performance and valued contribution to the business.

Mr Lord currently holds no options and 18,400,110 fully paid ordinary shares in the Company. Mr Lord serves at the pleasure of the Board in accordance with its charter as set out in the UXC Limited Corporate Governance Guide.

Retirement and Termination

Retirement benefits are provided to Mr Lord through his private company.

Compensation of Executive Management and Business Unit ManagementExecutive Management comprise the direct reports of the Executive Chairman, and Business Unit Management comprises those executives that have responsibilities for individual Business Units. Figure 1.2 of the UXC Limited Corporate Governance Guide (available on the Company’s website www.uxc.com.au) details the Group organisational structure, which should be referred to in order to assist in identifying officers that are categorized as Executive Management and Business Unit Management within this report. For the purposes of this report, each category is referred to as executives. Only Directors and Executive Management are classified as Key Management Personnel (KMP) as defined by AASB 124. KMP’s have authority and responsibility for planning, directing and controlling the activities of UXC Limited, directly or indirectly and are responsible for the entity’s governance. Business Unit Management’s authorities and responsibilities do not extend to the Group level.

Compensation ComponentsExecutives are compensated through a variety of components which include:

■ short-term employee benefits;

■ post-employment benefits;

■ other long-term benefits;

■ termination benefits; and

■ share-based payments.

Short-term employee benefits include cash salary, fees and short-term compensated absences, non-monetary benefits and other short-term employee benefits. Post-employment benefits include superannuation and other post-employment compensation. Share-based payments include equity-settled share-based payment transactions involving shares and options, cash-settled share-based payment transactions and other forms of share-based compensation. Basic salary, superannuation contributions and other benefits paid to executives occurs within a framework called Total Fixed Remuneration (TFR) in which participants are accorded some flexibility when choosing the precise mix of cash, superannuation contributions and other benefits in which the employee’s remuneration is totalled.

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The compensation benefits provided to UXC’s executives include salary, fees, bonuses and non-monetary benefits including the provision of motor vehicles and health benefits. Salary categories include fixed entitlements, while incentive categories include ‘at-risk’ remuneration and short and medium term incentives. The Company has adopted measures whereby reward is directly linked to the necessary attainment of a range of prescriptive performance objectives contributing to the Company’s performance goals and profitability. This ‘at-risk’ component encourages executives to consistently strive to provide shareholders with the most effective value for money.

To achieve this, remuneration of executives may encompass a fixed remuneration component including salary, non-monetary benefits, and superannuation benefits, as well as a variable or ‘at-risk’ component which may be settled in cash and/or securities.

The relative weighting of fixed and variable components for target performance is set according to the scope of the executive’s role. The ‘at-risk’ component is linked to those roles in which market value provides compelling reasons to provide some individuals with higher levels of remuneration, while also recognising the importance for providing shareholders with value. To ensure that fixed remuneration for the Company’s most senior executives remains competitive, it is reviewed annually based on performance and market data.

The ‘at-risk’ component ranges from 27% to 63% of total remuneration (which is equivalent to some 50% to 100% of the fixed entitlement component), with the average occurrence being around 50% of total remuneration.

There are some executives that have no ‘at-risk’ component. In such instances, fixed remuneration has been determined relative to performance evaluation and independent market data, sometimes with the assistance of external consultants. Many of these executives have sufficient incentive for superior performance due to their entitlement to further consideration in earn-out situations subsequent to acquisition, existing substantial shareholdings, and/or existing substantial option holdings. Others will participate in a Nomination and Remuneration Committee recommended, and Board approved Business Unit-based bonus pool, in which a bonus pool is created at:

■ 10% of actual PBT between 90% to 100% of PBT budget, after accrual of the bonus; plus

■ 15% of actual PBT between 100% to 200% of PBT budget, after accrual of the bonus; plus

■ % at the discretion of the CEO / Board over 200% of PBT budget.

Once the bonus pool is created in accordance with the above earnings metrics, disbursement of the full amount is still contingent upon achievement of the cash flow and health and safety performance targets.

The vesting portion of the pool is then distributed to the Business Unit management team on a discretionary basis through consultation between the Business Unit CEO, the Group CEO, and the Executive Chairman.

The key performance indicators and other targets against which performance is measured for determining the proportion of ‘at-risk’ compensation which is earned are generally as follows:

■ Financial Parameters – actual compared to budget for items including revenue, EBITDA, PBT, and income tax. The actual parameters applied are dependent upon the roles and responsibilities of the executive in question. These parameters comprise some 70% to 80% of the total ‘at-risk’ compensation available to be earned. No ‘at-risk’ compensation is available for an actual performance that is below budget by 85% or more.

■ Business Management Parameters – performance metrics such as cash generation, number of days sales outstanding in debtors, inventory turnover, cost/revenue ratios, and staff utilisation are measured against pre-determined targets.

■ Customer Satisfaction – retention, quality, cross-selling, new accounts.

■ Business Growth – NPAT, earnings per share, price earnings ratio, revenue, new order value, acquisitions, new customers.

■ Staff – training, development, turnover, teamwork.

■ Other – governance, capital management.

The targets against which performance is measured for this criteria are quantified during the annual strategic review and budgeting process undertaken by the Company. For Executive Management, the parameters are based on Group or Company performance, while for Business Unit Management; they are based on Business Unit performance, in line with the UXC business model.

Post Employment Benefits

Post employment benefits include superannuation and prescribed retirement benefits. They are included in TFR.

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Share-based Payments

Equity based compensation is comprised of share options granted under the UXC Incentive Plan or shares allotted under the Executive Share Scheme. Such grants are made as medium to long term incentives that are designed to allow employees to be compensated for their role in the sustained growth in shareholder value. The size of such grants is linked to the Company’s performance and the individual’s level of responsibility, performance and potential.

The terms of the UXC Incentive Plan include the following:

Options:

■ Entitlement – each option will entitle the option holder to subscribe for one fully paid ordinary share in the capital of the Company.

■ Period – in general, subject to the satisfaction of any performance criteria determined by the Directors, 50% of any single tranche of options may be exercisable after 1 year from their date of issue and the remaining 50% may be exercisable after 2 years from their date of issue. In addition, irrespective of the satisfaction of performance criteria, the options will be exercisable if a takeover bid is made to acquire any issued shares of the Company at the discretion of the Directors (unless, in their opinion, an intention to make an equivalent offer for the options is given), or a person gives the Company a substantial holder notice disclosing a voting interest to a number of shares that is greater than 30% of the Company’s issued voting shares. Different exercise periods apply where the Executive ceases to be employed by the Company or a group company.

■ Expiry - options which are not exercised within 3 years of the date of issue will lapse automatically.

■ Exercise Price – each option will be issued for nil consideration on grant. On exercise, the option holder must pay an amount that is determined by the Directors at the date of grant, but no less than the average market sale price of ordinary shares of the Company on the ASX for the 10 trading days immediately preceding the date of the invitation to issue the option, for each share they acquire (Exercise Price). In practice, grants of options made under the terms of the ESOP over the last three years have had an exercise price established at a premium of 15% to 25% of the volume weighted average trading price of the underlying shares for the 20 days preceding issue.

■ Quotation – the options are not quoted on any stock exchange.

■ Transferability – the options are generally not transferable.

■ Termination – the options lapse upon the termination of the employee.

■ Capital Reconstructions – customary capital re-organisation clauses apply to options issued such that the number of options and issue price, or both, must be amended in the event of rights issues, bonus issues, capital reconstructions and similar events.

Performance Rights:

■ Entitlement – each performance right will entitle the option holder to subscribe for one fully paid ordinary share in the capital of the Company.

■ Period – performance rights have vesting conditions in the first year after issue tied to actual profit before tax performance compared to budget at the Business Unit level (50%), the Group level (25%) and the Company level (25%). Rights are lapsed for those conditions not achieved after year one. Additionally, the performance rights have two further exercise conditions, whereby 50% of vested rights may be exercisable after two years from their date of issue subject to continuing employment, and the remaining 50% of vested rights may be exercisable after three years from their date of issue subject to continuing employment. In addition, irrespective of the satisfaction of performance criteria, the performance rights will be exercisable if a takeover bid is made to acquire any issued shares of the Company at the discretion of the Directors (unless, in their opinion, an intention to make an equivalent offer for the options is given), or a person gives the Company a substantial holder notice disclosing a voting interest to a number of shares that is greater than 30% of the Company’s issued voting shares. Different exercise periods apply where the Executive ceases to be employed by the Company or a group company.

■ Expiry – performance rights which are not exercised within 3 years of the date of issue will lapse automatically.

■ Exercise Price – each performance right will be issued for nil consideration on grant. Each performance right may be exercised into one share subject to the achievement of vesting conditions and exercise conditions for nil consideration.

■ Quotation – the options are not quoted on any stock exchange.

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■ Transferability – the options are generally not transferable.

■ Termination – the options lapse upon the termination of the employee.

■ Capital Reconstructions – customary capital re-organisation clauses apply to options issued such that the number of options and issue price, or both, must be amended in the event of rights issues, bonus issues, capital reconstructions and similar events.

The terms of the Executive Share Scheme (ESS) include the following:

■ Qualifying tax-exempt scheme where issues of up to $1,000 in value are tax free, subject to certain ESS terms. Shares allotted under this scheme are purchased at market price.

■ Tax-deferred investment scheme which allows participants to opt to participate in the ESS upon the achievement of performance bonus or under salary sacrifice arrangements, the tax on which is deferred for up to 10 years, after which gains in share capital are subject to capital gains tax. Any gains in share capital prior to the tax deferred date are taxed as ordinary income. Shares allotted under this scheme are purchased at market price, and the company contributes 1 share for every 10 purchased under the scheme.

■ Deferred payment share acquisition plan under which participants may take advantage of an interest free loan facility provided by the Company to acquire shares in the Company. The loan is repayable within the earlier of 3 years or the date of termination of employment. Any gains in share capital are subject to capital gains tax. Shares issued under this scheme will be issued at no less than the volume weighted average market price of the shares for the 20 days preceding the award period.

Scheme rules are available to shareholders at the registered office of the Company or by post, upon shareholders’ request.

A Long Term Incentive (LTI) share-based payment plan for Executive Management was approved by the Board in FY07 after recommendations proposed by independent consultants and review by the Remuneration Committee.

The LTI was issued in FY07 in two components – an Option Plan and a Deferred Payment Share Acquisition Plan (being part of the Employee Option Plan and Employee Share Plan respectively). The options have a three year vesting period subject to achieving the relevant performance hurdles and remaining employed at the end of the third year from issue. The shares are restricted for four years.

For each year that the performance hurdles are achieved, one third of the options will vest, available for exercise subject to continued employment at the end of year three. The hurdles are:

■ Achievement of UXC PBT budget (before acquisitions);

■ Achievement of yearly target EPS growth.

Achievement of one hurdle in each year vests 50% of the LTI, both vest 100%, of that year’s entitlement. Vested entitlements are forfeited upon resignation of the executive prior to 30 June 2009. Vested entitlements are payable on a pro rata basis upon termination by UXC. As at 30 June 2010, one third of the options so awarded had vested, none were exercised, and all have lapsed.

During FY10, the Board approved changes to the Deferred Payment Share Acquisition Plan awards that had been previously been made to Executive Management as part of the LTI described previously.

These changes were made so as to remove an onerous and unforeseen financial penalty that had been incurred by the recipients, not to provide a further benefit. This was resolved to be necessary as the LTI was intended as a reward to incentive performance, but was instead acting as a penalty which was distractive and hampered performance.

The changes were to extend the repayment date until such time as the shares cease to be a Restricted Share in accordance with the ESS; and that the shares will cease to be Restricted Shares and repayment will become due on a limited recourse basis upon the occurrence of any of the following events:

■ A change in control of the Company;

■ The Company being placed in administration;

■ The death of a participant;

■ A participant being unable to perform his duties through illness or accident;

■ The termination of a participant other than for cause.

Employment Agreements

Executives serve under terms and conditions contained in a standard Executive Employment Agreement, that allows for termination under certain conditions with 3 to 6 months notice, depending on the role and responsibility of the executive. The agreements include restraints of trade on the employee as well as confidentiality and intellectual property agreements.

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Compensation Table

Details of the nature and amount of each element of the compensation of each Director of UXC Limited and named Company and Group executives of the consolidated entity receiving the highest emoluments are set out in the following tables.

Table A: Compensation for Directors and Executive Management Year Ended 30 June 2010

Short-term Employee Benefits

Post employment

benefitsShare-based

payments

Long Term Employee

Benefits % Performance

RelatedSalary/Fees Cash STINon-Monetary

benefitsSuper-

annuationEquity-settled

options1Earned

not Vested7 Total

Non-Executive Directors Fees

Geoffrey Cosgriff $80,000 - - $5,400 - - $85,400 0%

Kingsley Culley $87,500 - - $5,400 - - $92,900 0%

Jean-Marie Simart $87,500 - - - - - $87,500 0%

Ron Zammit $67,500 - - $5,400 - - $72,900 0%

Executive Chairman Geoffrey Lord $465,000 - - - - - $465,000 0%

Executive and Business Unit Management Salary

Cris Nicolli CEO - Business Solutions Group $445,539 $96,6002 - $14,461 $11,732 $96,893 $665,225 31%

Michael Waymark CEO - Field Solutions Group $293,578 $27,0003 - $26,712 - - $347,290 8%

Paul Fielding CEO – Professional Solutions Group $223,623 - - $20,127 - - $243,750 0%

Ralph Pickering Director – Mergers, Acquisitions and Investments $321,307 - $15,9475 $14,461 $9,402 $77,503 $438,620 20%

Mark Hubbard Finance Director / Company Secretary $319,720 $73,2804 $5,8196 $14,461 $6,504 $67,843 $487,627 30%

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1 Options over shares issued as part of remuneration have been valued in accordance with Australian Accounting Standard AASB 2, using the Binomial Valuation Methodology. The value of the options is determined on the grant date and is included in remuneration on a proportionate basis from grant date to vesting date. Details of options issued, exercised, and lapsed is contained in Tables B and C, below.

2 Prescribed details of bonus paid:

The incentive paid and included as 30 June 2010 reported remuneration was 40% of the performance based at-risk compensation available in respect of the year ended 30 June 2009. The performance based at-risk compensation available in respect of the year ended 30 June 2010 is $241,500. Of this amount, approximately 86% is indicated to have been earned in respect of that period. It will vest at such time as it is recommended by the Executive Chairman and ratified by the Remuneration Committee. As such, it has not been paid during FY10 nor included in the above table.

The incentive forfeited as a result of non-achievement of the performance criteria was 60% of the performance based at-risk compensation available in respect of the year ended 30 June 2009. The performance based at-risk compensation forfeited in respect of performance for the year ended 30 June 2010 is 14%, based on amounts to be vested and not paid at balance date.

The performance based at-risk compensation available in respect of future years is $241,500 and is payable upon achievement of the relevant performance criteria. Based on the historical achievement of performance criteria, the capability and calibre of the executive, the current economic climate and the anticipated financial performance of the Group, estimates of the range of likely minimum to maximum possible values of bonus vesting in future years is 70% to 90%.


The incentive paid and included as 30 June 2010 reported remuneration was 19% of the performance based at-risk compensation available in respect of the year ended 30 June 2009. The performance based at-risk compensation available in respect of the year ended 30 June 2010 is $144,000. Of this amount, approximately 0% is indicated to have been earned in respect of that period.

The incentive forfeited as a result of non-achievement of the performance criteria was 81% of the performance based at-risk compensation available in respect of the year ended 30 June 2009. The performance based at-risk compensation forfeited in respect of performance for the year ended 30 June 2010 is 100%.

The performance based at-risk compensation forfeited in respect of performance for the year ended 30 June 2009 is 81%, based on amounts to be vested but not paid at balance date. The performance based at-risk compensation available in respect of future years is $144,000 and is payable upon achievement of the relevant performance criteria. Based on the historical achievement of performance criteria, the capability and calibre of the executive, the current economic climate and the anticipated financial performance of the Group, estimates of the range of likely minimum to maximum possible values of bonus vesting in future years is 70% to 90%.


The incentive paid and included as 30 June 2010 reported remuneration was 48% of the performance based at-risk compensation available in respect of the year ended 30 June 2009. The performance based at-risk compensation available in respect of the year ended 30 June 2010 is $153,000. Of this amount, approximately 94% is indicated to have been earned in respect of that period. It will vest at such time as it is recommended by the Executive Chairman and ratified by the Remuneration Committee. As such, it has not been paid during FY10 nor included in the above table.

The incentive forfeited as a result of non-achievement of the performance criteria was 52% of the performance based at-risk compensation available in respect of the year ended 30 June 2009. The performance based at-risk compensation forfeited in respect of performance for the year ended 30 June 2010 is 6%, based on amounts to be vested and not paid at balance date.

The performance based at-risk compensation available in respect of future years is $153,000 and is payable upon achievement of the relevant performance criteria. Based on the historical achievement of performance criteria, the capability and calibre of the executive, the current economic climate and the anticipated financial performance of the group, estimates of the range of likely minimum to maximum possible values of bonus vesting in future years is 70% to 90%.

5 Comprising motor vehicle and other benefits.

6 Comprising car park benefits.

7 Vesting conditions have been met for performance rights issued as the FY10 medium term incentive pursuant to the UXC Incentive Plan. Further exercise conditions are required to be met for the entitlement to be exercisable – continued employment as at 30 June 2011 and 30 June 2012 allows the securities to be exercised 50% and 100% respectively.

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Directors’ Report

Table A: Compensation for Directors and Executive Management Year Ended 30 June 2009

Short-term Employee Benefits

Post employment

benefitsShare-based

payments % Performance

RelatedSalary/Fees Cash STINon-Monetary

benefitsSuper-

annuationEquity-settled

options1 Total

Non-Executive Directors Fees

Geoffrey Cosgriff $80,000 - - $5,400 - $85,400 0%

Kingsley Culley $87,500 - - $5,400 - $92,900 0%

Jean-Marie Simart $87,500 - - - - $87,500 0%

Ron Zammit $67,500 - - $5,400 - $72,900 0%

Executive Chairman Geoffrey Lord $465,000 - - - - $465,000 0%

Executive and Business Unit Management Salary

Cris Nicolli CEO - Business Solutions Group $446,255 $199,2762 - $15,946 - $661,478 30%

Michael Waymark CEO - Field Solutions Group $293,578 $52,6973 - $26,422 - $372,697 14%

Paul Fielding CEO – Professional Solutions Group $103,210 - - $9,288 - $112,4987 0%

Ralph Pickering Director – Mergers, Acquisitions and Investments $328,785 - $15,9475 $13,745 - $358,477 0%

Mark Hubbard Finance Director / Company Secretary $320,437 $96,6944 $5,8196 $14,890 - $437,839 22%F

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1 Options over shares issued as part of remuneration have been valued in accordance with Australian Accounting Standard AASB 2, using the Binomial Valuation Methodology. The value of the options is determined on the grant date and is included in remuneration on a proportionate basis from grant date to vesting date. Details of options issued, exercised, and lapsed is contained in Tables B and C, below.


The incentive paid was 82.5% of the performance based at-risk compensation available in respect of the year ended 30 June 2008. The performance based at-risk compensation available in respect of the year ended 30 June 2009 is $241,500. Of this amount, approximately 40% is indicated to have been earned in respect of that period. It will vest at such time as it is recommended by the Executive Chairman and ratified by the Remuneration Committee. As such, it has not been paid nor included in the above table.

The incentive forfeited as a result of non-achievement of the performance criteria was 17.5% of the performance based at-risk compensation available in respect of the year ended 30 June 2008. The performance based at-risk compensation forfeited in respect of performance for the year ended 30 June 2009 is 60%, based on amounts to be vested but not paid at balance date.


The incentive paid was 53% of the performance based at-risk compensation available in respect of the year ended 30 June 2008. The performance based at-risk compensation available in respect of the year ended 30 June 2009 is $144,000. Of this amount, approximately 19% is indicated to have been earned in respect of that period. It will vest at such time as it is recommended by the Executive Chairman and ratified by the Remuneration Committee. As such, it has not been paid nor included in the above table

The performance based at-risk compensation forfeited in respect of performance for the year ended 30 June 2008 is 47%, based on amounts to be vested but not paid at balance date. The performance based at-risk compensation available in respect of future years is $144,000 and is payable upon achievement of the relevant performance criteria. Based on the historical achievement of performance criteria, the capability and calibre of the executive, the current economic climate and the anticipated financial performance of the Group, estimates of the range of likely minimum to maximum possible values of bonus vesting in future years is 70% to 90%.


The incentive paid was 63% of the performance based at-risk compensation available in respect of the year ended 30 June 2008. The performance based at-risk compensation available in respect of the year ended 30 June 2009 is $153,000. Of this amount, approximately 48% is indicated to have been earned in respect of that period. It will vest at such time as it is recommended by the Executive Chairman and ratified by the Remuneration Committee. As such, it has not been paid nor included in the above table.

The incentive forfeited as a result of non-achievement of the performance criteria was 37% of the performance based at-risk compensation available in respect of the year ended 30 June 2008. The performance based at-risk compensation forfeited in respect of performance for the year ended 30 June 2009 is 52%, based on amounts to be vested but not paid at balance date.

The performance based at-risk compensation available in respect of future years is $153,000 and is payable upon achievement of the relevant performance criteria. Based on the historical achievement of performance criteria, the capability and calibre of the executive, the current economic climate and the anticipated financial performance of the group, estimates of the range of likely minimum to maximum possible values of bonus vesting in future years is 70% to 90%.

5 Comprising motor vehicle and other benefits.

6 Comprising car park benefits.

7 Mr Fielding joined UXC on 1 January 2009.

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Directors’ Report

Table B: Option holdings of Directors and Executive Management Year Ended 30 June 2010

Number of options held at 1 July 2009

Options granted in current

financial year1

Options exercised during the current

financial year2

Other changes during current financial year Expiry – E Lapse – L

Options outstanding at 30 June 2010

Number of options exercisable at end of period


Executive Chairman

Geoffrey Lord 2,850,091 1,529,506 1,450,091 1,400,000E 1,529,506L

- -

Executive and Business Unit Management

Cris Nicolli CEO – Business Solutions Group

387,916 445,614 175,497 34,753E 195,413E 154,775L

273,092 -

Michael Waymark CEO – Field Solutions Group

525,000 347,633 25,000 297,633L 550,000 550,000

Paul Fielding CEO – Professional Solutions Group

428,051 - 428,051 - - -

Ralph Pickering Director – Mergers,Acquisitions and Investments

599,941 346,535 347,431 42,510E 231,000E 107,093L

218,442 -

Mark Hubbard Finance Director/Company Secretary

272,401 330,235 132,401 154,000E 125,019L

191,216 -

The above table sets out the details of options held during the year for Directors and Executive and Business Unit Management and their related parties. The options are over fully paid un-issued shares in UXC.

1 Options issued include adjustment to options held for the 1 for 10 bonus issue of shares granted to all shareholders and allotted on 28 April 2010.

2 Options exercised are for those options issued pursuant to the Prospectus dated 27 March 2009 for an offer, at no cost to shareholders, of one Bonus Option for every ten shares held on the record date of 14 April 2009. None of this pro-rata securities distribution to all shareholders was issued to executives as a component of remuneration.F

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Table B: Option holdings of Directors and Executive Management Year Ended 30 June 2009

Number of options held at 1 July 2008

Options granted in current

financial year1

Options exercised during the current

financial year

Other changes during current financial year Expiry – E Lapse – L

Options outstanding at 30 June 2009

Number of options exercisable at end of period


Executive Chairman

Geoffrey Lord 1,400,000 1,450,091 - - 2,850,091 1,400,000



355,333 210,250 - 177,667L 387,916 177,666


500,000 25,000 - - 525,000 -


- 428,051 - - 428,051 -

Ralph Pickering Director – Mergers, Acquisitions and Investments

420,000 389,941 - 210,000L 599,941 210,000

Mark Hubbard Finance Director/Company Secretary

280,000 132,401 - 140,000L 272,401 140,000

The above table sets out the details of options held during the year for Directors and Executive and Business Unit Management and their related parties. The options are over fully paid un-issued shares in UXC.

1 Options issued are pursuant to the Prospectus dated 27 March 2009 for an offer, at no cost to shareholders, of one Bonus Option for every ten shares held on the record date of 14 April 2009. None of this pro-rata securities distribution to all shareholders was issued to executives as a component of remuneration.

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Directors’ Report

Table C: Options of Directors, Executive and Business Unit Management granted, exercised or lapsed during the period Year Ended 30 June 2010

Options Granted Options Exercised Options Lapsed Total value of Options granted,

exercised and lapsed

$

Value of Options included in

remuneration for the year

$

Percentage of remuneration

for the year that consists of options

%

Value at Grant date1

$

Value at Exercise date2

$

Value at Lapse date3

$


Executive Chairman

Geoffrey Lord $493,333 - $688,278 $1,181,611 - -



$138,000 - $69,649 $207,649 11,732 2%


$96,000 - $133,935 $229,935 - -


- - - - - -


$105,000 - $48,192 $153,192 $9,402 3%


$102,000 - $56,259 $158,529 $6,504 2%

1 Valued in accordance with AASB 2, using the Binomial Valuation Methodology.

2 Options exercised per Table B are pursuant to the Prospectus dated 27 March 2009 for an offer, at no cost to shareholders, of one Bonus Option for every ten shares held on the record date of 14 April 2009. None of this pro-rata securities distribution to all shareholders was issued to executives as a component of remuneration, and is therefore excluded from this table.

3 Valued at the intrinsic value at the date the options were exercised, expired or lapsed (i.e. – the difference between the exercise price of the option and the market price of the share).For

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Table C: Options of Directors, Executive and Business Unit Management granted, exercised or lapsed during the period Year Ended 30 June 2009

Options Granted Options Exercised Options Lapsed Total value of Options granted,

exercised and lapsed

$

Value of Options included in

remuneration for the year

$

Percentage of remuneration for

the year that consists of options

%

Value at Grant date1

$

Value at Exercise date2

$

Value at Lapse date2

$

Non-Executive Directors - - - - - -

Executive Chairman

Geoffrey Lord - - - - - -



- - - - - -


- - - - - -



- - - - - -


- - - - - -

1 Options issued per Table B are pursuant to the Prospectus dated 27 March 2009 for an offer, at no cost to shareholders, of one Bonus Option for every ten shares held on the record date of 14 April 2009. None of this pro-rata securities distribution to all shareholders was issued to executives as a component of remuneration, and is therefore excluded from this table.

2 Valued at the intrinsic value at the date the options were exercised, expired or lapsed (i.e. – the difference between the exercise price of the option and the market price of the share).

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Directors’ Report

Notes to Tables B and C – 30 June 2010

Geoffrey Lord – 1,400,000 unlisted options issued on 1 December 2006 with a strike price of $1.46 expired out of the money on 1 December 2009 when the market price was $0.78. 1,529,506 performance rights (inclusive of adjustment for the bonus share issue) issued in accordance with resolutions passed at the Annual General Meeting in November 2009 as short and long term incentives lapsed on 30 June 2010 as performance hurdles were not achieved when the market price for UXC fully paid ordinary shares was $0.45.

Cris Nicolli – 195,413 unlisted options (inclusive of adjustment for the bonus share issue) issued on 1 December 2006 with a strike price of $1.03 expired out of the money on 30 June 2010 when the market price was $0.45. 427,847 performance rights (inclusive of adjustment for the bonus share issue) were issued as an FY10 medium term incentive pursuant to the UXC Incentive Plan with a nil strike price and subject to vesting and exercise conditions. 154,775 of these performance rights lapsed on 30 June 2010 as failing to meet vesting conditions, when the market price for UXC fully paid ordinary shares was $0.45. 34,753 bonus options with a strike price of $0.45 expired on 31 March 2010 when the market price for UXC fully paid ordinary shares was $0.51.

Michael Waymark – 297,633 performance rights (inclusive of adjustment for the bonus share issue) were issued as an FY10 medium term incentive pursuant to the UXC Incentive Plan with a nil strike price and subject to vesting and exercise conditions. 297,633 of these performance rights lapsed on 30 June 2010 as failing to meet vesting conditions, when the market price for UXC fully paid ordinary shares was $0.45.

Ralph Pickering – 231,000 unlisted options (inclusive of adjustment for the bonus share issue) issued on 1 December 2006 with a strike price of $1.03 expired out of the money on 30 June 2010 when the market price was $0.45. 325,535 performance rights (inclusive of adjustment for the bonus share issue) were issued as an FY10 medium term incentive pursuant to the UXC Incentive Plan with a nil strike price and subject to vesting and exercise conditions. 107,093 of these performance rights lapsed on 30 June 2010 as failing to meet vesting conditions, when the market price for UXC fully paid ordinary shares was $0.45. 42,510 bonus options with a strike price of $0.45 expired on 31 March 2010 when the market price for UXC fully paid ordinary shares was $0.51.

Mark Hubbard – 154,000 unlisted options (inclusive of adjustment for the bonus share issue) issued on 1 December 2006 with a strike price of $1.03 expired out of the money on 30 June 2010 when the market price was $0.45. 316,235 performance rights (inclusive of adjustment for the bonus share issue) were issued as an FY10 medium term incentive pursuant to the UXC Incentive Plan with a nil strike price and subject to vesting and exercise conditions. 125,019 of these performance rights lapsed on 30 June 2010 as failing to meet vesting conditions, when the market price for UXC fully paid ordinary shares was $0.45.

Notes to Tables B and C – 30 June 2009

Cris Nicolli – 177,677, or one third, of the options issued on 1 December 2006 at an exercise price of $1.03 and an expiry date of 30 June 2010 in accordance with the terms of the LTI program previously considered lapsed on 30 June 2009 as the relevant performance hurdles were not met, when the market price was $0.465.

Ralph Pickering – 210,000, or one third, of the options issued on 1 December 2006 at an exercise price of $1.03 and an expiry date of 30 June 2010 in accordance with the terms of the LTI program previously considered lapsed on 30 June 2009 as the relevant performance hurdles were not met, when the market price was $0.465.

Mark Hubbard – 140,000, or one third, of the options issued on 1 December 2006 at an exercise price of $1.03 and an expiry date of 30 June 2010 in accordance with the terms of the LTI program previously considered lapsed on 30 June 2009 as the relevant performance hurdles were not met, when the market price was $0.465.

No payments have been made to any executive before they took office as part of the consideration for the executive agreeing to hold office.

This directors’ report is signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors

Geoffrey F Lord Jean-Marie Simart Director Director

Melbourne 23 September 2010

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Auditor’s Independence DeclarationF

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Corporate Governance Statement

Framework and ApproachThe Board of UXC supports the intent of the ASX Corporate Governance Council’s principles of good corporate governance and strives to meet their spirit and wherever possible the requirements of the best practice recommendations.

In carrying out its responsibilities and powers within a framework of good corporate governance practice, the Board is at all times determined to recognise its overriding responsibility to act honestly, fairly, diligently and in accordance with the law in serving the interests of UXC’s shareholders, as well as its employees, customers, and the community; and to work to promote and maintain an environment within UXC that establishes its policies and procedures as basic guidelines for all of its employees and representatives.

The Directors’ primary objective is to provide direction and governance to the business such that increased value is realized for shareholders. The Directors also ensure the employees of the Company and its subsidiaries are highly motivated and expertly managed with a high standard of legislative compliance and ethical behaviour.

A description of the Company’s main corporate governance practices follows. This statement reflects UXC’s practices at 30 June 2010 and up to the date of the report. All of these practices were in place for the entire financial year, except where otherwise stated.

The complete UXC Corporate Governance Guide can be found on the company’s website at www.uxc.com.au.

ASX Corporate Governance Council Best Practice Recommendations and UXC Compliance

Principle 1 Lay solid foundations for management and oversight

Recommendation 1.1 Formalise and disclose the functions reserved to the board and those delegated to management.

Comply Rationale:

The Board’s role and responsibility are detailed in the UXC Corporate Governance Guide – Responsibilities of the Board and Delegated Authority, and the Board Charter. These can be summarised as:

■ Strategic Planning and Financial Management Oversight, including: • Issue of Capital• Expenditure & Commitments• Delegation of Authority• Business & Strategic Plans• Annual Budget• Strategic Planning & Financial Performance Oversight

■ Risk and Compliance Oversight, including:• Internal & External Compliance• Codes of Conduct• Policies and Procedures• ASX Announcements• Other Communications• Financial Reporting• Internal Control Framework

■ Executive Management Oversight, including:• Employment terms and appraisal of the CEO• Employment terms of Executive Directors, the Company Secretary,

and direct reports to the CEO• Executive Development & Succession Planning

Delegation of authority to management and limits thereto for each of these matters is considered within the UXC Corporate Governance Guide available on the Company’s website at www.uxc.com.au.

Each Director has the right to seek independent professional advice, at the Company’s expense, in order to fulfil their duties as Director of the Company, with the prior consent of the Chairperson which may not be unreasonably withheld.

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Recommendation 1.2 Formalise and disclose the process for evaluating the performance of management.

Comply Mutually agreed upon performance targets are set for senior and mid managers. These targets are reported on monthly. Further information is contained in the accompanying Remuneration Report.

Recommendation 1.3 Provide information regarding adherence to Principal 1 and its components.

Comply The required information has been disclosed herein, the UXC Corporate Governance Guide and/or within the Directors’ Report.

Principle 2 Structure the Board to add value

Recommendation 2.1 A majority of the Board should be independent Directors.

Comply Rationale:

The Board aims to have a majority of non-executive Directors who satisfy the following criteria for independence:

■ No material relationship;

■ Not a recent former employee;

■ Not a recent auditor to the Company or otherwise associated as specified; and

■ Not associated with executive management via family.

■ Not a substantial shareholder of the company

Mr Lord is the only director who is not independent, by virtue of his executive management duties and his ownership interest in the Company. All other Directors in office during the year have been, and at the date of the report are, independent.

Recommendation 2.2

and

Recommendation 2.3

The Chairperson should be an independent director.

The roles of the Chairperson and the Chief Executive Officer should not be exercised by the same individual.

Do not comply Rationale:

UXC recognises the objectives of board independence and separation of duties to better position the Board to meet goals such as independence from business operations, improved Board skills, and improved Board performance and accountability, as demonstrated through vision, leadership, external perspective, and success.

UXC values these objectives, and believes that there are mitigating factors within its Group organisational structure at this time which compensates for non-compliance with these underlying recommendations.

UXC has a unique structure and position in the Australian business landscape. The unusual constitution of the UXC organisational structure is based upon a framework of semi-autonomous Business Units, with management being given Freedom within Boundaries to operate those businesses. Specifically, UXC is comprised of three operating Groups that in aggregate comprise some 18 operating Business Units. Each Group (Business Solutions Group, Professional Solutions Group and Field Solutions Group) has a divisional CEO who is not a director. Each Business Unit also has their own CEO and management team. The Groups and Business Units operate semi-autonomously within the constraints of the control and governance framework enforced by UXC and adopted by the Group.

Each subsidiary Business Unit is empowered to succeed and provided with access to the strength and depth of the overall organisation to gain combined benefits. UXC acts as a supervisory and coordinating entity, guiding and directing the efforts of each Business Unit for the betterment of the group as a whole. The Chairperson of the Company also carries the title of CEO but he is, in practice, not directly operating within the individual businesses. As such, the Executive Chairman of UXC remains independent of the underlying operations of UXC carried on by its Business Units. Operations are within the direct control of the Business Unit CEO and supervised by the Group CEO. In practice, this actually brings the accountability, performance, vision and leadership to the operating Business Units as sought by the best practice recommendations.

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Recommendation 2.2

and

Recommendation 2.3

The Chairperson should be an independent director.

The roles of the Chairperson and the Chief Executive Officer should not be exercised by the same individual.

Continued As such, although UXC does not have an independent Chairperson or a separation of the roles of Chief Executive Officer and Chairperson of the Board, the Board consider UXC to be compliant with the spirit, if not the letter, of these recommendations, and that the structure continues to be effective. Therefore, UXC is confident that in practice there is a satisfactory independence and separation of the operational management of the Company from Board oversight duties, notwithstanding the technical non-compliance with best practice recommendations. This situation is subject to annual review by the Board, and it is the intent of the Board that the Company comply in future.

Recommendation 2.4 The Board should establish a nomination committee.

Comply Rationale:

UXC Limited has a Nominations and Remuneration Committee which identifies and makes recommendations on:

■ executive appointments and succession planning

■ board membership, composition and performance

■ remuneration policies and reward structure

based on individual and company performance, general pay environments and in compliance with the ASX Listing Rules and Corporations Act (2001) (Cth).

The Nominations and Remuneration Committee Charter is contained within the UXC Corporate Governance Guide and is available on the Company’s website at www.uxc.com.au.

The Nominations and Remuneration Committee meets at least twice annually and more frequently if necessary. Current members of the Committee are Mr Geoff Cosgriff (Chairman), Mr Jean-Marie Simart and Mr Kingsley Culley. All are independent directors.

Recommendation 2.5 Disclose the process for evaluating the performance of the board, its committees and individual directors.

Comply Rationale:

The Chairman of the Remuneration and Nomination Committee conducts an annual survey covering areas of board performance with all directors. At completion of the survey a report is produced which is discussed with the entire board.

In addition to the above, the Remuneration and Nomination Committee annually reviews the composition and effectiveness of all board committees.

Recommendation 2.6 Provide the information indicated in Guide to reporting on Principle 2.

Comply Rationale:

The required information has been disclosed herein and/or within the Directors’ Report.

Principle 3 Promote ethical and responsible decision-making

Recommendation 3.1 Establish a code of conduct to guide the Directors, the chief executive officer (or equivalent), the chief financial officer (or equivalent) and any other key executives as to:

3.1.1 the practices necessary to maintain confidence in the company’s integrity

3.1.2 the practices necessary to take into account legal obligations and reasonable expectations of stakeholders

3.1.3 the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

Comply Rationale:

UXC has a Code of Conduct for Directors, executives, management and staff based upon the Australian Public Service Values and Code of Conduct. Additionally, UXC has a Code of Conduct for Finance Directors, CFOs and senior finance officers involved in or influencing financial reporting based upon the Group 100 Code of Conduct for Finance Directors. The Code requires high standards of adherence to the principles of honesty and integrity, legal compliance, confidentiality, transparent communications and dealings and internal controls to safeguard assets and risk exposure. An employee aware of activities occurring that may impact poorly on UXC is obliged to notify the relevant Executive so action can be taken to minimise the impact.

These codes are contained within the UXC Corporate Governance Guide included in staff induction material, published on internal intranet sites and available on the Company’s website at www.uxc.com.au.

Recommendation 3.2 Disclose the policy concerning trading in company securities by Directors, officers and employees.

Comply Rationale:

UXC has an Insider Trading policy which regulates the period within which company securities can be traded, establishes policy for the management of confidential information and for the prevention of misuse of price sensitive data, and determines the designated employees covered by the policy.

This policy, which is actively communicated to staff and monitored by the Company Secretary for compliance, is contained within the UXC Corporate Governance Guide and is available on the Company’s website at www.uxc.com.au.

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Comply Rationale:


Principle 4 Safeguard Integrity in financial reporting

Recommendation 4.1 The board should establish an audit committee.

Comply Rationale:

The Audit Committee advises the Board on audit and financial reporting matters, and corporate governance, including review of the external auditor’s performance and independence, making recommendations as to the appointment of the external auditor, integrity of the financial statements, compliance with legal and regulatory requirements, and evaluating the performance, resourcing and effectiveness of internal audit programmes.

The Audit Committee meets at least five times annually and more frequently if necessary.

Recommendation 4.2 Structure the audit committee so that it consists of:

■ only non-executive Directors

■ a majority of independent Directors

■ an independent chairperson, who is not chairperson of the board

■ at least three members.

Comply Rationale:

Current members of the Audit Committee are Mr Jean-Marie Simart (Chairman), Mr Geoff Cosgriff and Mr Kingsley Culley. All are independent directors.

At all times during the period the committee membership was in compliance with best practice recommendations regarding composition of the committee. The committee is deemed to be of sufficient size, independence, financial and technical expertise to discharge its mandate effectively.

Recommendation 4.3 The audit committee should have a formal charter.

Comply Rationale:

The Audit Committee Charter is contained within the UXC Corporate Governance Guide and is available on the Company’s website at www.uxc.com.au.


Comply Rationale:


Principle 5 Make timely and balanced disclosure

Recommendation 5.1 Establish and disclose written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.

Comply Rationale:

UXC has Continuous Disclosure Policies and Procedures that govern the manner in which UXC communicates with its shareholders and the market in compliance with its regulatory obligations and for the benefit of its stakeholders. The policies and procedures establish an internal notification and decision making process, roles and responsibilities in identifying, approving, and releasing disclosable information, process for timely disclosure, compliance, and treatment of market briefings.

This policy is contained within the UXC Corporate Governance Guide and is available on the Company’s website at www.uxc.com.au.

UXC is committed to giving investors timely access to understandable and relevant information. Announcements may be reviewed by an external professional consultant for clear and balanced communication within the bounds of continuous disclosure requirements set out in the ASX Listing Rules and Corporations Act 2001. UXC also publishes on its website all material releases that it makes to the ASX Company Announcements Platform, media releases, its annual and interim financial reports, notices of meetings, and presentations made to fund managers, brokers and analysts.


Comply Rationale:

The required information has been disclosed herein.

Principle 6 Respect the rights of shareholders

Recommendation 6.1 Design and disclose a communications policy to promote effective communication with shareholders and encourage effective participation at general meetings.

Comply Rationale:

UXC provides access to company information by communicating with shareholders in the following ways:

■ Disclosures to the ASX (placed on the Company’s website www.uxc.com.au)

■ Annual Financial Reports

■ Half yearly reports

■ Investor presentations, Chairman’s Interviews and Chairman’s General Meeting address are webcast at www.uxc.com.au

■ Notices of Annual General Meeting and Explanatory Memoranda

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Comply Rationale:

The required information has been disclosed herein.

Principle 7 Recognise and manage risk

Recommendation 7.1 Establish and disclose policies for the oversight and management of material business risks.

Comply Rationale:

The Risk Management Committee assists the Board in relation to the oversight of policies and procedures regarding internal control structures and risk management systems. The Risk Management Committee meets at least two times annually and more frequently if necessary. Current members of the Committee are Mr Kingsley Culley (Chairman), Mr Ron Zammit and Mr Jean-Marie Simart. All are independent.

The functions of the Risk Management Committee are complemented by the Risk Management Plan, providing a holistic approach to the identification, quantification, mitigation, avoidance and/or management of risk throughout the Company. The Committee Charter and Risk Management Plan are contained within the UXC Corporate Governance Guide and are available on the Company’s website at www.uxc.com.au.

Recommendation 7.2 The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.

Comply Rationale:

The Board receives monthly reports from Executive Management and bi-annual reports from the Risk Management Committee in relation to identifying any possible risk throughout the Company. In addition internal audits are carried out by the Risk and Compliance Manager and these are reported to both the Risk Management Committee and Chief Financial and Risk Officer.

Recommendation 7.3 The board should disclose whether it has received assurance from the chief executive officer and the chief financial officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operated effectively in all material respects in relation to financial reporting risks.

Comply Rationale:

The CEO and CFO of each business unit within the UXC Group provide a formal statement to executive management at the end of each reporting period confirming that the business unit’s financial reports are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board, and that the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects. The UXC Executive Chairman and Finance Director then provide formal written assurance of the same to the Board.


Comply Rationale:


Principle 8 Remunerate fairly and responsibly

Recommendation 8.1 The board should establish a remuneration committee.

Comply Rationale:

The Remuneration Committee performs its functions within the Nominations and Remuneration Committee. It advises the Board on remuneration policies and practices, including fairly and responsibly remunerating executives and non-executive Directors, incentive and bonus schemes, superannuation and other employment benefits, and termination payments. The Committee’s Charter details policies and practices that enable it to attract and retain executives and Directors who will create value for shareholders. See also 2.4 above.

The Committee Charter is contained within the UXC Corporate Governance Guide and is available on the Company’s website at www.uxc.com.au. The Nominations and Remuneration Committee meets at least twice annually and more frequently if necessary. Current members of the Committee are Mr Geoff Cosgriff (Chairman), Mr Jean-Marie Simart and Mr Kingsley Culley. All are independent.F

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Recommendation 8.2 Clearly distinguish the structure of non-executive Directors’ remuneration from that of executives.

Comply Rationale:

Remuneration is detailed within the Remuneration Report accompanying the Annual Report explaining the remuneration components, equity performance incentives and Retirement benefits awarded to Non-executive Directors and the Executive Chairman.


Comply Rationale:


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Consolidated Income Statement For the Financial Year ended 30 June 2010

Notes2010 $000

2009 $000

Continuing OperationsRevenue 2 680,071 637,124Other income 5,429 806Employee benefits expense (301,010) (291,307)Services and products used (117,901) (119,729)Contractor and sub-contractor expense (114,480) (85,510)Licence fee expense (19,499) (27,361)Vehicle & equipment running costs (18,118) (17,671)Travel expenses (11,173) (12,907)Depreciation and amortisation expense 2 (11,953) (10,572)Occupancy expenses (13,297) (12,665)Professional services expense (11,368) (11,331)Finance charges 2 (8,647) (9,029)Communication expenses (6,839) (6,473)Recruitment and staff training costs (3,277) (3,766)Operating lease costs (3,103) (2,571)Advertising and marketing costs (2,757) (2,030)Insurance costs (2,508) (2,389)Share of profit of associates accounted for using the equity method 9 252 626Loss on disposal of property, plant and equipment (1,171) -Provision for stock obsolescence (448) (345)Bad and doubtful debts expense (2,429) (648)Redundancy and restructuring costs - (2,062)Impairment of investment in listed corporations - (317)Impairment of non-current assets (2,335) (590)Other expenses (12,558) (10,709)Profit from continuing operations before income tax expense 20,881 8,574Income tax expense 3 (2,282) (1,209)Net profit from continuing operations 18,599 7,365Net profit / (loss) from discontinued operations 40 (21,471) 6,512Profit / (loss) attributable to members of the parent entity 24 (2,872) 13,877

Earnings per share attributable to members of the parent entity from continuing and discontinued operations Cents CentsBasic earnings / (loss) per share 25 (1.01) 5.79Diluted earnings / (loss) per share 25 (1.00) 5.65Earnings per share from continuing operationsBasic earnings per share 25 6.52 3.07Diluted earnings per share 25 6.51 3.00

The above consolidated income statement should be read in conjunction with the accompanying notes.

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Consolidated Statement of Comprehensive Income For the Financial Year ended 30 June 2010

2010 $000

2009 $000

Profit / (loss) for the year (2,872) 13,877

Other comprehensive income

Exchange differences arising on translation of foreign operations (983) 315

Gain / (loss) on interest rate cash flow hedges taken to equity 1,233 (2,173)

Other comprehensive income for the year 250 (1,858)

Total comprehensive income / (loss) for the year (2,622) 12,019

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

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Consolidated Statement of Financial Position As at 30 June 2010

Notes2010 $000

2009 $000

Current assetsCash and cash equivalents 37,758 29,511Trade and other receivables 4 110,580 106,266Accrued income 4 28,610 54,716Inventories 5 15,602 18,218Other financial assets 6 348 176Current tax assets 3 5,376 1,908Other 7 16,500 17,109Total current assets 214,774 227,904Non-current assets Trade and other receivables 8 11,915 5,794Investments accounted for using the equity method 9 4,259 4,217Other financial assets 10 6 4Property, plant and equipment 11 25,942 29,978Goodwill 12 175,280 174,922Other intangible assets 13 7,728 8,637Deferred tax assets 3 7,206 1,133Other 14 241 649Total non-current assets 232,577 225,334Total assets 447,351 453,238Current liabilitiesTrade and other payables 15 115,049 112,801Unearned income 32,835 31,292Borrowings 16 26,971 19,191Provisions 17 21,644 19,621Other financial liabilities 18 683 1,918Other 18 1,168 3,414Total current liabilities 198,350 188,237Non-current liabilitiesUnearned income 860 317Borrowings 19 49,794 68,027Provisions 20 4,718 4,491Other 18 354 898Total non-current liabilities 55,726 73,733Total liabilities 254,076 261,970Net assets 193,275 191,268EquityIssued capital 22 169,528 152,494Reserves 23 125 3,396Retained earnings 24 23,622 35,378Total equity 193,275 191,268

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

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Consolidated Statement of Changes in Equity As at 30 June 2010

Issued capital

$000

Foreign currency

translation reserve

$000

Share based payments

reserve $000

Cash flow hedge

reserve $000

Employee equity settled

benefit reserve $000

Deferred shares recognised

directly in equity $000

Retained earnings

$000

Total attributable to

members of the parent

$000

Balance at 1 July 2008 127,853 (2,193) 579 257 2,455 - 32,219 161,170

Profit for the year - - - - - - 13,877 13,877

Other comprehensive income - 315 - (2,173) - - - (1,858)

Total comprehensive income and expense for the year - 315 - (2,173) - - 13,877 12,019

Shares issued 25,041 - - - - - - 25,041

Share buy back (364) - - - - - - (364)

Share issue costs (436) - - - - - - (436)

Dividend paid - - - - - - (10,718) (10,718)

Deferred consideration recognised directly in equity - - - - - 3,750 - 3,750

Share based payments 400 - - - 406 - - 806

Balance at 30 June 2009 152,494 (1,878) 579 (1,916) 2,861 3,750 35,378 191,268

Balance at 1 July 2009 152,494 (1,878) 579 (1,916) 2,861 3,750 35,378 191,268

Profit/(loss) for the year - - - - - - (2,872) (2,872)

Other comprehensive income - (983) - 1,233 - - - 250

Total comprehensive income and expense for the year - (983) - 1,233 - - (2,872) (2,622)

Shares issued 17,104 - - - - - - 17,104

Share issue costs (70) - - - - - - (70)

Dividend paid - - - - - - (8,884) (8,884)

Deferred consideration in equity issued as shares - - - - - (3,750) - (3,750)

Share based payments - - - - 229 - - 229

Balance at 30 June 2010 169,528 (2,861) 579 (683) 3,090 - 23,622 193,275

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. For

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Consolidated Statement of Cash Flows For the Financial Year ended 30 June 2010

Notes2010 $000

2009 $000

Cash flows from operating activities

Receipts from customers 842,369 774,852

Payments to suppliers and employees (803,901) (744,419)

Interest received 869 1,052

Interest and other costs of finance paid (9,065) (8,398)

Income taxes paid (2,316) (7,375)

Net cash inflow / (outflow) from operating activities 36 (a) 27,956 15,712

Cash flows from investing activities

Proceeds from sale of investments (net of costs) - 892

Proceeds from business sold 2,466 -

Payments for investments (98) (55)

Payments for businesses acquired in current year 36 (b) (1,080) (1,321)

Payments for businesses acquired in prior year (1,178) (1,091)

Cash acquired from acquisitions 259 2,922

Payments for property, plant and equipment (6,955) (10,542)

Proceeds from sale of property, plant and equipment 534 1,159

Dividends received from associates 210 -

Payment for other intangible assets (4,830) (5,615)

Net cash inflow / (outflow) from investing activities (10,672) (13,651)

Cash flows from financing activities

Proceeds from issues of equity securities 22 (a) 9,707 6,977

Payment for share buyback and costs - (373)

Payment for share issue costs (70) (427)

Proceeds from borrowings 58,275 21,983

Repayment of borrowings (68,727) (39,893)

Dividends paid (8,129) (9,112)

Net cash inflow / (outflow) from financing activities (8,944) (20,845)

Net (decrease) / increase in cash held 8,340 (18,784)

Cash at the beginning of the financial year 29,511 48,219

Effects of exchange rate changes on cash (93) 76

Cash at the end of the financial year 37,758 29,511

Non-cash financing and investing activities 36 (c)

Financing arrangements 36 (d)

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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Notes to the Financial Statements For the Financial Year ended 30 June 2010

Note 1 Summary of Significant Accounting Policies

Statement of compliance

The financial report is a general purpose Financial Report, which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). Compliance with the A-IFRS ensures that the Consolidated Financial Statements and Notes of the Group comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the Directors on 23 September 2010.

Basis of preparation

The Financial Report has been prepared on the basis of historical cost, except for financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

Adoption of new and revised accounting standards

In the current year, the Group has adopted all of the new and revised Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period.

Standards and Interpretations materially affecting amounts reported in the current period (and/or prior periods)

No new and revised Standards and Interpretations relevant to the Group’s operations have been adopted in the current period which have materially affected the amounts reported in these financial statements.

Standards and Interpretations adopted with no material effect on the financial statements

The following new and revised Standards and Interpretations relevant to the Group’s operations have been adopted in these financial statements. Their adoption has not had any significant impact on the amounts reported in these financial statements but may affect the accounting for future transactions or arrangements.

Standard/Interpretation

Effective for annual reporting

periods beginning on or after

■ AASB 3 Business Combinations issued March 2008 1 July 2009

■ AASB 127 Consolidated and Separate Financial Statement issued March 2008

1 July 2009

■ AASB 123 Borrowing Costs issued June 2007 1 January 2009

■ AASB 2008-1 Amendments to Australian Accounting Standards – Share-based Payments: Vesting Conditions and Cancellations

1 January 2009

■ AASB 2008-7 Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

1 January 2009

■ AASB 2008-8 Amendments to Australian Accounting Standards – Eligible Hedged Items

1 July 2009

Standards and Interpretations in issue not yet adopted

At the date of authorisation of the financial statements, the Standards and Interpretations relevant to the Group’s operations listed below were in issue but not yet effective.

Standard/Interpretation

Expected to be applied financial

year ending

Effective for annual reporting

periods beginning on or after

■ AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project

30 June 2011 1 January 2010

■ AASB 2009-8 Amendments to Australian Accounting Standards – Group Cash-Settled Share-based Payment Transactions


■ AASB 124 Related Party Disclosures (revised December 2009), AASB 2009-12 Amendments to Australian Accounting Standards


■ AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9


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Note 1 Summary of Significant Accounting Policies (continued)The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Company or the Group.

These Standards and Interpretations will be first adopted in the financial statements of the Group that relates to the first annual reporting period beginning after the effective date of pronouncement.

Significant accounting policies

The following significant accounting policies have been adopted in the preparation and presentation of the Financial Statements.

(i) Basis of consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the Group, being the Company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 127 ‘Consolidated and Separate Financial Statements’. A list of subsidiaries appears in Note 32 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after assessment, the fair value of the identifiable net assets acquired exceeds the cost of acquisition, the deficiency is credited to profit and loss in the period of acquisition.

The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity.

In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the Group are eliminated in full.

Investments in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case is accounted for in accordance with AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisitions changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments.

Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost or acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of the acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of the acquisition, after reassessment, is recognised immediately in profit or loss. Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

(ii) Revenue recognition

Sale of goods / licensing of software products

Revenue from the sale of goods and licensing of software products is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods or software products.

Rendering of services

Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of completion of the contract is determined as follows:

■ Revenue from time and material contracts is recognised at the contractual rates as labour hours are delivered and direct expenses incurred;

■ Revenue from fixed-price and construction contracts is recognised by reference to the stage of completion of the contract activity at the balance date, determined as the proportion of contract costs incurred for work to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work and claims are included to the extent they have been agreed with the customer. Contract costs are recognised as expenses in the period in which they are incurred. When it is probably that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Interest revenue

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield of the financial asset.

(iii) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws

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that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is accounted for using the comprehensive statement of financial position liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company / Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill.

Tax consolidation

The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. UXC Limited is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences are recognised by the members of the tax consolidated group using the ‘separate taxpayer within group’ approach. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts are recognised as payable to or receivable by the Company and each member of the group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax-consolidated group in accordance with the arrangement. Further information about the tax funding arrangement is detailed in Note 3 to the financial statements. Where the tax contribution amount recognised by each member of the tax-consolidated group for a particular period is different to the aggregate of the current tax liability or asset and any deferred tax asset arising from unused tax losses and tax credits in respect of that period, the difference is recognised as a contribution from (or distribution to) equity participants.

(iv) Foreign currency

The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Australian dollars, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise except:

■ exchange differences on transactions entered into in order to hedge certain foreign currency risks (refer Note 1(xx)); and

■ exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to occur, and which form part of the net investment in a foreign operation, are recognised in the foreign currency translation reserve and recognised in profit or loss on disposal of the net investment.

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Note 1 Summary of Significant Accounting Policies (continued)On consolidation, the assets and liabilities of the Group’s foreign operations (including comparatives) are translated into Australian dollars at exchange rates prevailing on the balance date. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such exchange differences are recognised in profit or loss in the period in which the foreign operation is disposed.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after the date of transition to A-IFRS are treated as assets and liabilities of the foreign entity and translated at exchange rates prevailing at the reporting date. Goodwill arising on acquisitions before the date of transition to A-IFRS is treated as an Australian dollar denominated asset.

(v) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments net of outstanding bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

(vi) Inventories

Inventories are valued at the lower of cost and net realisable value. Costs have been assigned to inventory quantities on hand at balance date using the weighted average cost basis. Cost comprises material, labour, sub-contract charges and direct contract expenses and an appropriate portion of fixed and variable overhead expenses.

(vii) Work in progress

Contract work in progress is stated at an aggregate of direct labour and materials, project overheads, plus profits recognised, less progress billings and provision for foreseeable losses.

(viii) Financial assets

Subsequent to initial recognition, investments in subsidiaries are measured at cost.

Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Available for sale financial assets

Certain investments held by the Group are classified as being available-for-sale and are stated at fair value less impairment. Gains and losses arising from changes in fair value are recognised directly in the available-for-sale revaluation reserve, until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in the available-for-sale revaluation reserve is included in profit or loss for the period.

Loans and receivables

Trade receivables, loans and other receivables are recorded at amortised cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each balance date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss is recognised directly in equity.

(ix) Property, plant and equipment

Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item.

Items of property, plant and equipment are depreciated / amortised over their expected useful lives from the date of acquisition using a combination of straight-line and diminishing value bases. Estimates of remaining useful lives are made on a regular basis for all assets. The expected useful lives are as follows:

■ Plant and equipment (including leased plant and equipment) Between 3-10 years

■ Leasehold improvements Between 2-10 years

■ Motor vehicles (including leased motor vehicles) Between 3-10 years

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(x) Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessor

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Group as lessee

Assets held under finance leases are initially recognised at fair value or, if lower, at an amount equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are charged directly against income. Finance leased assets are amortised on a straight-line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(xi) Goodwill

Goodwill, representing the excess of the cost of acquisition over the fair value of the identifiable assets, liabilities and contingent liabilities acquired, is recognised as an asset and not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (CGUs), or groups of CGUs, expected to benefit from the synergies of the business combination. CGUs (or groups of CGUs) to which goodwill has been allocated are tested for impairment annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired.

If the recoverable amount of the CGU (or group of CGUs) is less than the carrying amount of the CGU (or groups of CGUs), the impairment loss is allocated first to reduce the carrying amount of

any goodwill allocated to the CGU (or groups of CGUs) and then to the other assets of the CGU (or groups of CGUs) pro-rata on the basis of the carrying amount of each asset in the CGU (or groups of CGUs). An impairment loss recognised for goodwill is recognised immediately in profit or loss and is not reversed in a subsequent period.

On disposal of an operation within a CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal of the operation.

(xii) Other intangible assets

Research expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

Development expenditure

Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred.

An intangible asset arising from development is recognised if, and only if, all the following are demonstrated:

■ the technical feasibility of completing the intangible asset so that it will be available for use or sale;

■ the intention to complete the intangible asset and use or sell it;

■ the ability to use or sell the intangible asset;

■ how the intangible asset will generate probable future economic benefits;

■ the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

■ the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.

The following useful lives are used in the calculation of amortisation:

■ Capitalised development costs Between 2 - 10 years

■ Trademarks Assessed as not having a finite useful life, therefore not amortised, and assessed for impairment annually.

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Note 1 Summary of Significant Accounting Policies (continued)Intangible assets acquired in a business combination

Intangible assets acquired in a business combination (such as customer contracts and relationships) are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair value can be measured reliably.

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. The amortisation terms of customer contracts and relationships are predominantly between 3 and 5 years, with one instance of ten years.

Software

Software purchased outright or under finance lease is stated at cost less accumulated amortisation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. Occasionally software is acquired from within the Group on a competitive basis on normal commercial terms.

Software is amortised on a straight-line basis over its expected useful life from the date of acquisition. Estimates of remaining useful life are reviewed at least annually. Software is amortised over terms ranging from 2 to 5 years.

(xiii) Impairment of assets

At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate (adjusted to reflect a pre-tax discount rate as required by the relevant Accounting Standard) that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately.

(xiv) Trade and other payables

Trade payables and other accounts payable are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services.

(xv) Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

■ where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

■ for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables respectively.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which are recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(xvi) Borrowings

Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit or loss over the period of the borrowing using the effective interest rate method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowings costs are recognised in profit or loss in the period in which they are incurred.

(xvii) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

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The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Onerous contracts

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

Restructuring

A restructuring provision is recognised when the Group has developed a detailed formal plan for restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed and not associated with the ongoing activities of the entity.

(xviii) Employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by the employees up to reporting date.

Contributions to defined contribution superannuation plans are expensed when employees have rendered services entitling them to the contributions.

(xix) Share-based payments

Equity-settled share-based payments granted after 7 November 2002 that were unvested as of 1 January 2005, are measured at fair value at the date of grant. Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.

(xx) Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including forward foreign exchange contracts and interest rate swaps. Further details of derivative financial instruments are disclosed in Note 37 to the financial statements.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in profit or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as hedges of highly probable forecast transactions (cash flow hedges), or hedges of net investments in foreign operations.

The fair value of hedging derivatives is classified as a non-current asset or a non-current liability if the remaining maturity of the hedge relationship is more than 12 months and as a current asset or a current liability if the remaining maturity of the hedge relationship is less than 12 months.

Derivatives not designated into an effective hedge relationship are classified as a current asset or a current liability.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are deferred in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Amounts deferred in equity are recycled in profit or loss in the periods when the hedged item is recognised in profit or loss. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in profit or loss.

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Note 1 Summary of Significant Accounting Policies (continued)Net investment hedge

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in the foreign currency translation reserve; the gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Gains and losses deferred in the foreign currency translation reserve are recognised immediately in profit or loss when the foreign operation is disposed of.

(xxi) Financial Instruments Issued by the Company

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the statement of financial position classification of the related debt or equity instruments.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Financial guarantee contract liabilities

Financial guarantee contracts are measured initially at their fair values and subsequently at the higher of the amount recognised as a provision and the amount initially recognised less cumulative amortisation in accordance with the disclosed revenue recognition policies.

(xxii) Critical Accounting Judgements and Key Sources of Estimation Uncertainty

In the application of the Group’s accounting policies, which are described above, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

Critical judgements in applying the Group’s accounting policies

Judgements made by management in the application of A-IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements.

Accounting policies are selected and applied in a manner that ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use of calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Details of the impairment review are provided at Note 12.

Impairment of other intangible assets

Determining whether intangible assets are impaired requires an estimation of the value in use of the cash-generating units to which the intangible assets have been allocated. The value in use of calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Details of the impairment review are provided at Note 13.

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Note 2 Profit from Continuing Operations2010 $000

2009 $000

(a) Revenue

Revenue from the rendering of services 551,027 488,997

Revenue from the sale of goods 127,789 146,992

678,816 635,989

Interest revenue 870 1,052

Other revenue 385 83

Total revenue 680,071 637,124

(b) Gains and losses

Net (loss) / gain on disposal of property, plant and equipment (1,171) (131)

Net gain on disposal of business 4,758 -

Net gain on disposal of investments - 56

(c) Finance charges

Interest and finance charges paid/payable 8,647 9,029

(d) Other expenses

Cost of goods sold 117,901 119,729

Depreciation and amortisation

- property, plant and equipment 9,476 8,093

- other intangible assets 2,477 2,479

Total depreciation and amortisation expense 11,953 10,572

Impairment of trade receivables 2,429 648

Write down of inventory to net realisable value 448 345

Operating lease rental expenses:

- minimum lease payments 14,693 12,038

Employee benefit expense:

- post-employment benefits - defined contribution plans 20,904 20,406

- share-based payments - equity settled share-based payments 229 406

- other employee benefits 279,877 270,495

Total employee benefit expense 301,010 291,307

Note 3 Income Taxes2010 $000

2009 $000

(a) Income tax recognised in profit or loss

The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows:Profit from continuing operations 20,881 8,574Profit / (loss) from discontinued operations (30,673) 9,303

Profit / (loss) from operations (9,792) 17,877

Income tax expense/(income) calculated at 30% (2,937) 5,363

Non-deductible expenses 355 367

Impairment losses on intangible asset and goodwill that are not deductible 271 -

Effect of higher tax rates on overseas income 47 -

Non-deductible loss 202

Research and development tax concession (323) (311)

Benefit of capital tax losses recouped in current year (1,427) (17)

Derecognition of deferred tax liability no longer required (209) -

Sundry 105 -

(4,118) 5,604

Over-provision in relation to the current tax of prior years (2,802) (1,604)

Total tax expense / (income) (6,920) 4,000

Tax expense in relation to continuing operations 2,282 1,209

Tax expense / (income) in relation to discontinued operations (9,202) 2,791


Tax expense / (income) comprises:

Current tax expense/(income) (847) 1,107

Deferred tax expense relating to temporary differences (6,073) 2,893


(b) Current tax assets / (liabilities)

Current tax assets / (liabilities) 5,376 1,908

(c) Deferred tax (liabilities) / assets

Deferred tax assets comprise:

Tax losses - revenue 621 503

Temporary differences (refer Note 3(d)) 6,585 630

Net deferred tax (liabilities) / assets 7,206 1,133

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Note 3 Income Taxes (continued)

(d) Deferred tax balances

2010

Opening balance

$000

Charged to income

$000

Acquisitions/ disposals

$000

Closing balance

$000

Temporary differences

Capitalised development costs (864) 232 - (632)

Accrued income (8,493) 4,312 - (4,181)

Identifiable intangible asset (328) 104 - (224)

Accrued expenses 1,215 637 - 1,852

Provisions 8,048 854 - 8,902

Doubtful debts and impairment losses

400 432 - 832

Property, plant and equipment (254) (558) - (812)

Other 906 (58) - 848

Net deferred temporary differences 630 5,955 - 6,585

Tax losses 503 118 - 621

Net deferred tax asset 1,133 6,073 - 7,206

2009

Opening balance

$000

Charged to income

$000

Acquisitions/ disposals

$000

Closing balance

$000

Temporary differences

Capitalised development costs (490) (374) - (864)

Accrued income (7,248) (1,245) - (8,493)

Identifiable intangible asset (287) (41) - (328)

Accrued expenses 1,207 (24) 32 1,215

Provisions 8,187 (220) 81 8,048

Doubtful debts and impairment losses

332 68 - 400

Property, plant and equipment 214 (468) - (254)

Other 731 (168) 343 906

Net deferred temporary differences 2,646 (2,472) 456 630

Tax losses 924 (421) - 503

Net deferred tax asset 3,570 (2,893) 456 1,133

(e) Unrecognised deferred tax balances

2010 $000

2009 $000

The following deferred tax assets have not been brought to account as assets:

Tax losses - capital 17,984 9,015

(f) Tax Consolidation

The Company and its wholly-owned Australian resident entities have formed a tax consolidated group with effect from 13 September 2002 and are therefore taxed as a single entity from that date. The head entity within the tax consolidated group is UXC Limited.

Entities within the tax consolidated group have entered into a tax funding arrangement and a tax-sharing agreement with the head entity. Under the terms of the tax funding arrangement, UXC Limited and each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the tax-consolidated group.

The tax sharing agreement entered into between members of the tax-consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.

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Note 4 Current Assets – Trade and Other Receivables and Accrued Income

2010 $000

2009 $000

Trade and other receivables1 104,868 104,262

Less: Allowance for doubtful debts2 (2,772) (1,336)

102,096 102,926

Finance lease receivable 1,008 797

Other receivables 7,476 2,543

Trade and other receivables 110,580 106,266

Accrued income 28,610 54,716

Movement in the allowance for doubtful debts

Balance at the beginning of financial year 1,336 1,108

Allowance utilised (993) (376)

Additional allowance recognised 2,429 604

Balance at the end of financial year 2,772 1,336

Ageing of past due but not impaired trade and other receivables

31 to 60 days 14,695 13,462

61 to 90 days 3,694 3,042

91 days and over 5,373 3,271

23,762 19,775

1 Average credit terms are 30 days, varying from COD to 60 days on specific engagements. No interest is charged on trade receivables which are past due. Trade receivables which are past due are provided for based on the estimated irrecoverable amount, determined by reference to past default history.

Included in the group’s trade receivables balance are debtors with a carrying amount of $23,762,000 (2009: $19,775,000) which are past due at the reporting date for which the group has not provided as there has not been a significant change in credit quality and the group believes that the amounts are still recoverable. The group does not hold any collateral over these balances.

2 In determining the recoverability of a trade receivable the group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being diverse. Accordingly, the group believes that no further credit provision is required in excess of the allowance for doubtful debts.

Note 5 Current Assets – Inventories

2010 $000

2009 $000

Raw materials and stores 4,168 3,716

Work in progress - 6

Finished goods 11,434 14,496

15,602 18,218

Note 6 Current Assets – Other Financial Assets2010 $000

2009 $000

Short term deposits 271 176

Sundry receivable 77 -

348 176

Note 7 Current Assets – Other Assets2010 $000

2009 $000

Prepayments 16,047 16,768

Sundry current assets 453 341

16,500 17,109

Note 8 Non-Current Assets – Trade and Other Receivables

2010 $000

2009 $000

Other non-current receivables 9,110 2,993

Finance lease receivable 2,805 2,801

11,915 5,794

Note 9 Non-Current Assets – Investments Accounted For Using The Equity Method

2010 $000

2009 $000

Investments accounted for using the equity method 4,259 4,217

Reconciliation of movement

Balance at beginning of financial year 4,217 3,591

Share of profit for the year 252 626

Dividends received (210) -

Balance at end of financial year 4,259 4,217

Associate Entities % shares held

NCSS Maintenance Services Pty Ltd (incorporated in Australia) 50% 50%

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Note 10 Non-Current Assets – Other Financial Assets

2010 $000

2009 $000

Other investments 6 4

6 4

Note 11 Non-Current Assets – Property Plant and Equipment

2010 $000

2009 $000

Leasehold improvements

At cost 4,202 4,705

Less: Accumulated amortisation (2,804) (2,616)

1,398 2,089

Plant and equipment

At cost 37,554 36,685

Under finance lease 8,048 6,603

45,602 43,288

Less: Accumulated depreciation and amortisation

At cost (24,557) (22,176)

Under finance lease (3,030) (1,715)

(27,587) (23,891)

18,015 19,397

Motor vehicles

At cost 8,438 8,947

Under finance lease 5,327 5,591

13,765 14,538

Less: Accumulated depreciation and amortisation

At cost (4,508) (4,380)

Under finance lease (2,728) (1,666)

(7,236) (6,046)

6,529 8,492

Total property, plant and equipment 63,569 62,531

Less: Accumulated depreciation and amortisation (37,627) (32,553)

25,942 29,978

Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year are set out below.

$000

Leasehold Improve-

mentsPlant and

Equipment

Leased Plant and

EquipmentMotor

Vehicles

Leased Motor

Vehicles Total

2009

Carrying amount at 1 July 2008 1,917 15,116 2,174 5,533 4,170 28,910

Additions 847 4,138 4,155 272 1,206 10,618

Disposals (66) (500) - (286) (438) (1,290)

Additions through acquisition of businesses - 90 - - - 90

Depreciation / amortisation (609) (4,271) (1,441) (952) (1,013) (8,286)

Net foreign currency exchange differences - (64) - - - (64)

Carrying amount at 30 June 2009 2,089 14,509 4,888 4,567 3,925 29,978

2010

Additions 270 4,916 983 329 456 6,954

Disposals (217) (843) (72) (146) (86) (1,364)

Additions through acquisition of businesses - 30 - - - 30

Depreciation / amortisation (744) (5,615) (781) (820) (1,696) (9,656)

Carrying amount at 30 June 2010 1,398 12,997 5,018 3,930 2,599 25,942F

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Note 12 Non-Current Assets – Goodwill 2010 $000

2009 $000

Gross carrying amount

Balance at beginning of financial year 174,922 154,435

Additional amounts recognised from business combinations occurring during the year (refer Note 33)

2,018 19,958

Additional amounts recognised / (derecognised) from business combinations occurring in prior years through attainment of earn-out targets

(1,147) 350

Effects of foreign currency exchange differences (100) 179

Balance at end of financial year 175,693 174,922

Accumulated impairment losses (413) -

Net book value 175,280 174,922

Allocation of goodwill to cash-generating units

Goodwill has been allocated for impairment testing purposes to fifteen (2009: twenty two) cash-generating units, within the three operating divisions. The carrying amounts of goodwill allocated to the three operating divisions are as follows:

Operating division

Field Solutions Group 31,859 33,019

Business Solutions Group 124,326 122,782

Professional Solutions Group 19,095 19,121

Total Goodwill 175,280 174,922

Within the three operating divisions, the cash-generating units that individually have been allocated more than 10% of the Group’s total carrying amount of goodwill are UXC Eclipse AD $18,836,000 (formed in 2010 by the combination of Eclipse Computing and UXC AD, which were separate cash generating units in 2009 with a combined goodwill of $18,940,000), Red Rock Consulting $38,263,000 (2009: $36,190,000), and UXC Professional Solutions Pty Ltd (formerly Ingena Group Limited) $19,095,000 (2009: $19,121,000).

The recoverable amount of the cash-generating units is determined via a value in use calculation which uses cash flow projections based on financial budgets for the subsequent financial year, which are then extrapolated over a further fourteen year period, culminating with a terminal value, and then discounted to present value using a post tax weighted average cost of capital rate of 10.7% p.a. (2009: 9.2% p.a.).

Cash flow projections for cash-generating units are based on budgeted gross margins during the projection period, increasing in revenue by an underlying growth rate of 3.2% per annum (2009: 2.8% p.a.) except where higher growth has been specifically forecast. The underlying growth rate has been determined by management to be conservative for impairment testing, evidenced by historical CPI and growth of the Group for the previous two years which has exceeded this rate.

The recoverable amounts thus calculated exceed the carrying amounts, after the Directors assessed that an impairment charge of $413,000 was required for the current financial year (2009: Nil). The impairment related to goodwill associated with electronic shelf labelling in ILID Pty Ltd (part of the Field Solutions Group), due to its commercialisation continuing to be behind expectation.

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Note 13 Non-Current Assets – Other Intangible Assets

$000

2009 IT SoftwareDevelopment

costs

Customer contracts/

relationships Trademarks Total


Balance at 1 July 2008 4,964 2,999 1,673 242 9,878

Additions 3,963 1,079 - 535 5,577

Impairment of intangible assets - (590) - - (590)

Net foreign currency exchange differences 23 - - - 23

Balance at 30 June 2009 8,950 3,488 1,673 777 14,888

Accumulated amortisation

Balance at 1 July 2008 (2,926) (445) (401) - (3,772)

Amortisation (1,739) (609) (131) - (2,479)

Balance at 30 June 2009 (4,665) (1,054) (532) - (6,251)

Net book value at 30 June 2009 4,285 2,434 1,141 777 8,637

2010


Balance at 1 July 2009 8,950 3,488 1,673 777 14,888

Additions 3,778 1,763 - 7 5,548

Impairment of intangible assets - - - - -

Disposals (702) (5,251) (153) (77) (6,183)

Balance at 30 June 2010 12,026 - 1,520 707 14,253

Accumulated amortisation

Balance at 1 July 2009 (4,665) (1,054) (532) - (6,251)

Amortisation (1,576) (507) (416) - (2,499)

Impairment of intangible assets - (1,845) - (77) (1,922)

Disposals 511 3,406 153 77 4,147

Balance at 30 June 2010 (5,730) - (795) - (6,525)

Net book value at 30 June 2010 6,296 - 725 707 7,728

The recoverable amount of development costs is determined via a value in use calculation which uses cash flow projections based on estimated cash flows over the relevant income generating period for the specific asset [up to 10 years] and then discounted to present value using a post-tax rate of 10.7% p.a. (2009: 9.2% p.a.).

The Directors assessed an impairment charge of $1,922,000 (2009: $590,000) which is identified separately in the income statement. The impairment predominantly related to capitalised development costs associated with electronic shelf labelling in ILID Pty Ltd (part of the Field Solutions Group), due to its commercialisation continuing to be behind expectation.

Note 14 Non-Current Assets – Other Assets2010 $000

2009 $000

Security deposits 98 449

Deferred expenditure 143 200

241 649

Note 15 Current Liabilities – Trade and Other Payables

2010 $000

2009 $000

Trade payables1 67,760 62,453

Other payables 47,289 50,348

115,049 112,801

1 Average credit terms is 30 days. No interest is charged on trade payables.

Note 16 Current Liabilities – Borrowings 2010 $000

2009 $000

Secured – at amortised cost

Commercial bills1 20,540 13,940

Lease liabilities (refer Note 27) 5,578 4,499

Unsecured – at amortised cost

Other loans 853 752

26,971 19,191

1 Commercial bills are secured by registered fixed and floating charges over the assets and undertakings of the Company and certain subsidiaries.

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Note 17 Current Liabilities – Provisions 2010 $000

2009 $000

Employee benefits 21,160 18,866

Premises leases1 164 309

Premises leases - onerous leases1 68 239

Provision for site rehabilitation1 36 36

Redundancies and restructuring1 22 -

Other1 194 171

21,644 19,621

1 Refer to Note 21 for further information.

Note 18 Other Liabilities2010 $000

2009 $000

Other financial liabilities

Interest rate swap at fair value (note 37(f)) 683 1,918

683 1,918

Other liabilities

Deferred consideration1

Cash 816 2,644

Equity 706 1,668

1,522 4,312

Current 1,168 3,414

Non-current 354 898

1,522 4,312

1 There are a number of agreements which have been entered into by the Company and certain subsidiaries with third parties which confer on those third parties rights to be issued equity, or receive cash payments at a future date. This deferred consideration arises in connection with acquisition agreements and includes ‘earn-out’ obligations in favour of the vendors of the acquired entity upon their attainment of certain earnings targets within certain timeframes. Where there is a likelihood of earn-outs being met and a reliable estimate of the obligations can be made, a liability has been raised.

Note 19 Non-Current Liabilities – Borrowings2010 $000

2009 $000

Secured – at amortised cost

Commercial bills1 43,646 57,821

Lease liabilities (refer Note 27) 6,130 10,189

Unsecured – at amortised cost

Other loans 18 17

49,794 68,027

1 Commercial bills are secured by registered fixed and floating charges over the assets and undertakings of the Company and certain subsidiaries.

Note 20 Non-Current Liabilities – Provisions 2010 $000

2009 $000

Employee benefits 2,486 2,636

Premises leases1 778 890

Premises leases - make good1 832 800

Other 622 165

4,718 4,491

1 Refer to Note 21 for further information.

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Note 21 ProvisionsReconciliation of the carrying amounts of each category of provisions (excluding employee benefits) at the beginning and end of the previous and current financial years are set out below.

$000

Premises Leases

Premises Leases – Make

Good

Premises Leases – Onerous

Leases

Redund-ancies and

Restructuring

Site Rehabilit-

ation Other

2009

Carrying amount at 1 July 2008 504 800 750 1,482 36 48

Additional provisions recognised 695 - - - - 288

Reductions arising from payments - - (511) (1,482) - -

Carrying amount at 30 June 2009 1,199 800 239 - 36 336

Current (refer Note 17) 309 - 239 - 36 171

Non-current (refer Note 20) 890 800 - - - 165

Carrying amount at 30 June 2009 1,199 800 239 - 36 336

2010

Carrying amount at 1 July 2009 1,199 800 239 - 36 336

Additional provisions recognised - 32 - 22 - 480

Reductions arising from payments (257) - (171) - - -

Carrying amount at 30 June 2010 942 832 68 22 36 816

Current (refer Note 17) 164 - 68 22 36 194

Non-current (refer Note 20) 778 832 - - - 622

Carrying amount at 30 June 2010 942 832 68 22 36 816

Note 22 Issued Capital(a) Issued and paid-up capital

2010 2009

Number 000 $000 Number 000 $000

Ordinary UXC shares1

Balance at beginning of year 216,492 137,533 194,610 127,853

Shares issued during the year:

Consideration for acquisitions 9,697 6,312 2,082 810

Exercise of options 87 - 199 -

Exercise of bonus options 22,705 9,707 - -

UXC IPS shares reclassified as UXC shares 17,337 9,448 1,919 1,046

1 in 10 distribution in lieu of an interim cash distribution 27,679 - - -

Equity based compensation 704 330 741 400

Dividend reinvestment plan 899 755 2,086 1,607

Share purchase plan - - 15,661 6,577

Share buy-back - - (806) (364)

Net movement 79,108 26,552 21,882 10,076

Less transaction costs - (70) - (396)

Balance of UXC shares at the end of the financial year 295,600 164,015 216,492 137,533

UXC IPS shares2

Balance at beginning of year 27,526 14,961 - -

Shares issued during the year:

Consideration for acquisitions - - 29,445 16,047

UXC IPS shares reclassified as UXC shares (17,337) (9,448) (1,919) (1,046)

Net movement (17,337) (9,448) 27,526 15,001

Less transaction costs - - - (40)

Balance of UXC IPS shares at the end of the financial year 10,189 5,513 27,526 14,961

Total share capital (UXC and UXC IPS shares) 305,789 169,528 244,018 152,494

1 Fully paid ordinary shares carry one vote per share and carry the rights to dividends.

2 UXC IPS shares are unquoted shares in UXC ranking equally in all respects with ordinary UXC shares, except that UXC IPS shares were entitled to additional UXC shares if Ingena achieves certain profit targets at June 2009 and June 2010 as set out in UXC’s Bidder’s Statement for the acquisition of Ingena Group Limited dated 12 November 2008. All remaining UXC IPS shares will be reclassified as UXC shares on 30 September 2010.

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(b) Reconciliation of un-issued shares in respect of which options are outstanding

Grant date

Options on Issue at

1 July 2009Exercise

PriceOptions Issued

Options Exercised

Options Lapsed

Expiry Date

Options on Issue at

30 June 2010No. $ No. No. No. No.

UXC Incentive Plan - Employee Options13 Jul 06 220,000 $1.16 - - (220,000) 13 Jul 09 -

30 Oct 06 288,000 $1.61 - - (288,000) 30 Oct 09 -

30 Oct 06 150,000 $1.68 - - (150,000) 30 Oct 09 -

01 Dec 06 527,666 $1.03 52,767 - (580,433) 30 Jun 10 -

01 Dec 06 162,000 $1.85 - - (162,000) 1 Dec 09 -

01 Dec 06 575,000 $1.77 - - (575,000) 1 Dec 09 -

01 Dec 06 250,000 $1.66 - - (250,000) 1 Dec 09 -

28 Feb 07 60,800 $2.12 - - (60,800) 27 Feb 10 -

30 Mar 07 50,000 $2.01 - - (50,000) 29 Mar 10 -

30 Mar 07 30,000 $2.10 - - (30,000) 29 Mar 10 -

30 Mar 07 35,000 $1.93 - - (35,000) 29 Mar 10 -

31 May 07 5,000 $2.29 - - (5,000) 30 May 10 -

31 May 07 50,000 $2.11 5,000 - (55,000) 30 May 10 -

22 Mar 07 100,000 $1.93 - - (100,000) 21 Mar 10 -

16 Jul 07 5,000 $3.22 500 - (5,500) 15 Jul 10 -

30 Aug 07 185,000 $2.76 13,500 - (50,000) 29 Aug 10 148,500

30 Aug 07 70,000 $2.88 7,000 - - 29 Aug 10 77,000

14 Sep 07 200,000 $2.74 10,000 - (100,000) 13 Sep 10 110,000

28 Sep 07 20,000 $2.80 2,000 - - 27 Sep 10 22,000

31 Oct 07 40,000 $2.61 4,000 - - 30 Oct 10 44,000

31 Dec 07 50,000 $2.30 - - (50,000) 30 Dec 10 -

31 Jan 08 500,000 $1.80 50,000 - - 30 Jan 11 550,000

30 Apr 08 25,000 $1.37 2,500 - - 29 Apr 11 27,500

30 Jun 08 555,000 $1.30 31,500 - (240,000) 29 Jun 11 346,500

30 Sep 08 165,000 $1.16 9,500 - (86,500) 29 Sep 11 88,000

31 Oct 08 50,000 $0.92 5,000 - - 30 Oct 11 55,000

27 Feb 09 150,000 $1.25 - - (150,000) 27 Aug 09 -

27 Feb 09 35,000 $0.51 3,500 - - 1 Mar 12 38,500

27 Feb 09 50,000 $0.49 5,000 - - 1 Mar 12 55,000

2 Apr 09 55,000 $0.49 3,500 - (20,000) 1 Apr 12 38,500

29 May 09 60,000 $0.49 6,000 - - 28 May 12 66,000

30 Oct 09 $1.04 275,000 - - 29 Oct 12 275,000

Sub Total 4,718,466 486,267 - (3,263,233) 1,941,500

Grant date

Options on Issue at

1 July 2009Exercise

PriceOptions Issued

Options Exercised

Options Lapsed

Expiry Date

Options on Issue at

30 June 2010No. $ No. No. No. No.

UXC Incentive Plan - Employee Performance Rights1 Jul 09 $0.00 5,628,518 - (3,071,967) 30 Jun 12 2,556,551

UXC Incentive Plan - Executive Director Options01 Dec 06 1,400,000 $1.46 - - (1,400,000) 1 Dec 09 -

UXC Incentive Plan - Executive Director Performance Rights1 Jul 09 $0.00 1,529,506 - (1,529,506) 30 Jun 12 -

Options issued in respect of business combinations16 Oct 06 1,000,000 $1.52 - - (1,000,000) 16 Oct 09 -

04 Apr 07 466,000 $1.92 - - (466,000) 3 Apr 10 -

30 Apr 08 103,049 $0.00 - (86,983) (16,066) 30 Sep 09 -

Sub Total 1,569,049 - (86,983) (1,482,066) -

Bonus Options 27 Mar 09 22,704,105 $0.45 - (22,704,105) - 31 Mar 10 -

Grand Total 30,391,620 7,644,291 (22,791,088) (10,746,772) 4,498,051

The employee option plan options on issue have been issued in accordance with the UXC Incentive Plan, and under the terms of their issue, options vest 50% after 12 months of issue and 100% after 24 months of issue, and may be exercised at any time from this date until the date of their expiry 36 months after issue.

The employee performance rights have been issued in accordance with the UXC Incentive Plan, and under the terms of their issue, have vesting conditions in the first year after issue tied to actual profit before tax performance compared to budget at the Business Unit level (50%), the Group level (25%) and the Company level (25%). Rights are lapsed for those conditions not achieved after year one. Additionally, the performance rights have two further exercise conditions, whereby 50% of vested rights may be exercisable after two years from their date of issue subject to continuing employment, and the remaining 50% of vested rights may be exercisable after three years from their date of issue subject to continuing employment.

The Bonus Options have been issued in accordance with a prospectus dated 27 March 2009 as an interim distribution to shareholders on a 1 for 10 basis.

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(c) Options issued during the year

Options exercisable at $1.04 issued in accordance with the UXC Incentive Plan (refer Note 29) 250,000

Options issued as an adjustment for the 1 for 10 bonus issue of shares (refer Note 29) 236,267

Performance rights exercisable at nil issued to employees in accordance with the UXC Incentive Plan (refer Note 29) 5,628,518

Performance rights exercisable at nil issued to Executive Directors in accordance with a resolution of shareholders at the Annual General Meeting in November 2009 (refer Note 29) 1,529,506

Total options issued during the year 7,644,291

Note 23 Reserves2010 $000

2009 $000

Foreign currency translation reserve1

Balance at the beginning of financial year (1,878) (2,193)

Translation of foreign operations (983) 315

Balance at the end of financial year (2,861) (1,878)

Share-based payments reserve2

Balance at the beginning of financial year 579 579

Issue of options as consideration for acquisition of businesses - -

Balance at the end of financial year 579 579

Cash flow hedge reserve3

Balance at the beginning of financial year (1,916) 257

Interest rate swaps 1,233 (2,173)

Balance at the end of financial year (683) (1,916)

Employee equity-settled benefits reserve4

Balance at the beginning of financial year 2,861 2,455

Share-based payments for employees 229 406

Balance at the end of financial year 3,090 2,861

Deferred shares recognised directly in equity5

Balance at the beginning of financial year 3,750 -

Deferred shares recognised directly in equity - 3,750

Deferred consideration recognised directly in equity issued as shares (3,750) 3,750

Balance at the end of financial year - 3,750Total reserves 125 3,396

1 The foreign currency translation reserve accumulates exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency (i.e. Australian dollars) which are recognised directly in other comprehensive income. The reserve includes gains and losses on hedging instruments that are designated as hedges of net investments in foreign operations. Exchange differences previously accumulated in the foreign currency translation reserve (in respect of translating both the net assets of foreign operations and hedges of foreign operations) are reclassified to profit or loss on the disposal or partial disposal of the foreign operation.

2 The share-based payments reserve recognises share options granted to vendors as part of business combinations.

3 The cash flow hedge reserve represents the cumulative portion of gains and losses on hedging instruments deemed effective in cash flow hedges. The cumulative deferred gain or loss on the hedging instrument is reclassified to profit or loss only when the hedged transaction affects the profit or loss, or is included as a basis adjustment to the non-financial hedged item, consistent with the relevant accounting policy.

4 The employee equity-settled benefits reserve recognises share options granted to employees under the employee share option plan.

5 The deferred shares recognised directly in equity recognises deferred consideration arising from business combinations due to be settled in shares where the number of shares to be issued is known.

Note 24 Retained Profits2010 $000

2009 $000

Retained profits at the beginning of the financial year 35,378 32,219

Net profit attributable to members of UXC Limited (2,872) 13,877

Dividends provided for or paid (refer Note 26) (8,884) (10,718)

Retained profits at the end of the financial year 23,622 35,378

Note 25 Earnings per Share ¢ per share ¢ per share

Basic earnings per share

From continuing operations 6.52 3.07

From discontinued operations (7.53) 2.72

Total basic earnings / (loss) per share (1.01) 5.79

Diluted earnings per share

From continuing operations 6.51 3.00

From discontinued operations (7.51) 2.65

Total basic earnings / (loss) per share (1.00) 5.65

$000 $000

The earning used in the calculation of basic and diluted earnings per share are:

From continuing operations 18,599 7,365

From discontinued operations (21,471) 6,512

Total basic earnings / (loss) per share (2,872) 13,877

Note 22 Issued Capital (continued)

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No. of shares 000

No. of shares 000

Weighted average number of ordinary shares used in calculating basic earnings per share: 285,151 239,821

Shares deemed to be issued in respect of business purchase agreements (deferred consideration) 691 5,468

Shares deemed to be issued for no consideration in respect of options over ordinary shares 56 77

Weighted average number of ordinary shares used in calculating diluted earnings per share 285,898 245,366

Potential ordinary shares that are not dilutive and therefore excluded from the weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share 1,742 7,384

Weighted average number of converted, lapsed or cancelled potential ordinary shares included in the calculation of diluted earnings per share 5,103 2,347

Ordinary shares issued after reporting date

197,585 ordinary shares have been issued after reporting date up to the date of the financial report from the conversion of UXC IPS.

Potential ordinary shares issued after reporting date

No options or performance rights were issued over ordinary shares after the balance date. No options were exercised into ordinary shares, and 335,500 options and 4,054,189 performance rights expired after the reporting date up to the date of the financial report.

Note 26 Dividends2010 $000

2009 $000

Recognised amounts

Ordinary shares

Fully franked dividend of 3.50 cents per share paid 20 November 2009 (in respect of year ended June 2009) 8,884 -

Fully franked dividend of 5.50 cents per share paid 21 November 2008 (in respect of year ended June 2008) - 10,718

8,884 10,718

Unrecognised amounts

Ordinary shares

A dividend has not been declared for the year ended 30 June 2010 - -

Fully franked dividend of 3.50 cents per share payable 20 November 2009 (in respect of year ended June 2009) - 8,780

- 8,780

Franked dividends

Franking account balance (tax paid basis) 8,627 14,863

Impact on franking account balance of dividends not recognised - (3,763)

8,627 11,100

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Note 27 Lease Commitments 2010 $000

2009 $000

Operating lease commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within one year 13,612 14,857

Later than one year but not later than five years 19,481 26,971

Later than five years - -

33,093 41,828

Finance lease commitments

Commitments in relation to finance leases are payable as follows:

Within one year 5,898 5,623

Later than one year but not later than five years 7,235 10,710

Later than five years - -

13,133 16,333

Less: Future lease finance charges (1,425) (1,645)

11,708 14,688

Lease liabilities provided for in the financial statements:

Current (refer Note 16) 5,578 4,499

Non-current (refer Note 19) 6,130 10,189

Total finance lease liability 11,708 14,688

Finance Leases

Finance leases relate to motor vehicles and plant and equipment with lease terms of between 1 and 6 years. The Group has options to purchase the equipment for a nominal amount at the conclusion of the lease agreements. The Group’s obligations under finance leases are secured by the assets leased. The carrying amount of the leased assets is shown in Note 11 Property Plant and Equipment. The fair value of the finance lease liabilities is approximately equal to their carrying amount.

Operating Leases

Operating leases relate to premises and plant and equipment with lease terms ranging from 1 to 6 years, with some contracts containing an option to extend for a further term. Some operating lease contracts contain market review clauses in the event that the Group exercises its option to renew. The Group does not have an option to purchase the leased asset at the expiry of the lease period.

Note 28 Contingent Liabilities2010 $000

2009 $000

Contingent liabilities

Particulars and estimated maximum amounts of contingent liabilities are as follows:

The Company and its subsidiaries have given guarantees of the performance of various projects and security for leased premises to third parties in the normal course of business (expiring at different dates) 15,461 17,158

Contractual Obligations

Certain subsidiaries have given guarantees pursuant to the performance of various projects and security for leased premises to third parties in the normal course of business. Certain subsidiaries have potential obligations and have provided warranties in the conduct of their business. Where there is a likelihood of a claim and a reliable estimate of an amount can be made, provision has been raised elsewhere in the financial report.

Deferred Consideration for Acquisitions

There are a number of agreements which have been entered into by UXC and its subsidiaries with third parties which confer on those third parties rights to be issued UXC shares, UXC options, or receive cash payments at a future date.

This Deferred Consideration arises in connection with acquisition agreements and includes ‘earn-out’ obligations in favour of the vendors of the acquired entity upon their attainment of certain earnings targets within certain timeframes. In addition to the Deferred Equity Right entitlements thereby conferred, some of the earn-outs also contemplate cash payments on the same or similar basis.

Where there is a likelihood of earn-outs being met and a reliable estimate of the obligations can be made, a liability has been raised in the financial report (refer Note 18).

Note 29 Share Based Payments

(a) UXC Employee Share Plan

The Company has a shareholder-approved share plan comprising three awards: a $1,000 Tax Exempt Plan under which the shares are issued at a 10% discount to market value and cannot be sold for three years; a Tax Deferred Plan under which the shares are issued at market value and are subject to forfeiture in certain circumstances; and a non-qualifying loan plan allowing a full recourse loan repayable in three years, to be provided to employees to acquire shares. All employees are eligible to participate in the plan. No ordinary shares were issued under the employee share plan during the year (2009: Nil).

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(b) UXC Incentive Plan

A total of 275,000 (2009: 590,000) options were granted to employees pursuant to the terms of the UXC Incentive Plan during the year. These options are exercisable at $1.04 per share with an expiry date of 29 October 2012. Share options carry no rights to dividends and no voting rights. No consideration is received for these share options at the time of their issue.

■ 236,267 options were issued during the year as an adjustment for the 1 for 10 bonus issue of shares carried out during the year.

■ 86,983 options (2009: 199,558) were exercised during the year at an exercise price of nil per share.

■ 3,263,233 options (2009: 3,599,941) lapsed during the year.

■ 1,941,500 options were on issue at 30 June 2010 (2009: 4,718,466) and are exercisable at prices ranging from $0.49 to $2.88 per share with expiry dates ranging from 29 August 2010 to 29 October 2012.

Details of options exercised in respect of the current year are as follows:

Options Exercised

No.Grant Date

Exercise Date

Expiry Date

Exercise Price

$

Shares Issued

No.

Fair Value Received1

$

Fair Value of Shares

at Date of Issue2

$

86,983 30 Apr 08 30 Sep 09 30 Sep 09 - 86,983 - $78,720

1 Fair value of consideration is measured as the nominal value of cash receipts on conversion.

2 The fair value of shares at the date of their issue is measured as the market value at close of trade on the date of their issue.

■ A total of 5,628,518 (2009: Nil) performance rights (inclusive of an adjustment for the 1 for 10 bonus issue of shares carried out during the year) were granted to employees pursuant to the terms of the UXC Incentive Plan during the year. These rights are exercisable at $nil per share with an expiry date of 30 June 2012. Performance rights carry no rights to dividends and no voting rights. No consideration is received for these share options at the time of their issue.

■ No performance rights were exercised during the year (2009: Nil).

■ 3,071,967 performance rights lapsed during the year (2009: Nil).

■ 2,556,551 performance rights were on issue at 30 June 2010 (2009: Nil) and are exercisable at $nil per share subject to satisfaction of remaining exercise conditions by 30 June 2012.

(c) UXC Incentive Plan – Directors Options

■ 1,529,506 performance rights were issued to Directors during the financial year as a share based payment, pursuant to a resolution by shareholders at the Annual General Meeting held in November 2009 (2009: Nil). Performance rights carry no rights to dividends and no voting rights. No consideration is received for these share options at the time of their issue.

■ No performance rights were exercised during the year (2009: Nil).

■ 1,529,506 performance rights lapsed during the year (2009: Nil).

■ 1,400,000 options on issue at 30 June 2009 exercisable at $1.46 per share with expiry date of

1 December 2009 expired out of the money on 1 December 2009.

Note 30 Remuneration of Auditors2010

$2009

$

Audit and other assurance services:

Auditor of the parent entity

- Audit or review of the financial report 629,000 617,000

- Audit of overseas entities 58,000 70,000

687,000 687,000

Other auditors 5,483 10,606

692,483 697,606

Other services:

Taxation services

- Auditor of the parent entity 322,315 145,473

Other

- Auditor of the parent entity 10,685 163,680

- Other auditors - 66,039

333,000 375,192

Total remuneration 1,025,483 1,072,798

The auditor of the parent entity is Deloitte Touche Tohmatsu.

It is the Company’s policy to employ Deloitte Touche Tohmatsu on assignments additional to their statutory audit duties where Deloitte Touche Tohmatsu expertise and experience with the Group are important. These assignments are principally tax advice and due diligence reporting on acquisitions or where Deloitte Touche Tohmatsu is awarded assignments on a competitive basis.

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Note 31 Key Management Personnel RemunerationThe individuals listed below have been identified as key management personnel (KMP) as defined by AASB 124. KMP’s have authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly and are responsible for the entity’s governance. Non-executive Directors are required to be included in this group, notwithstanding that they do not consider themselves to be part of ‘management’.

The key management personnel of the Company and the Group during the financial year were:

■ Geoffrey Lord (Executive Chairman)

■ Geoffrey Cosgriff (Non-Executive Director)

■ Kingsley Culley (Non-Executive Director)

■ Jean-Marie Simart (Non-Executive Director)

■ Ron Zammit (Non-Executive Director)

■ Cris Nicolli (Chief Executive Officer – Business Solutions Group)

■ Paul Fielding (Chief Executive Officer – Professional Solutions Group)

■ Michael Waymark (Chief Executive Officer – Field Solutions Group

■ Ralph Pickering (Director, Mergers, Acquisitions and Investments)

■ Mark Hubbard (Finance Director and Company Secretary)

Short-term employee benefits

Post employment

benefits

Share-based

payments

Long-term

employee benefits

Salary/Fees

$Cash STI

$

Non-monetary

benefits $

Total short term employee

benefits $

Super-annuation

$

Equity-settled

options1 $

Earned not

vested $

Total $

2010 2,391,267 196,880 21,766 2,609,913 106,422 27,638 242,239 2,986,212

2009 2,279,765 348,667 21,766 2,650,198 96,491 - - 2,746,689

1 Options over shares issued as part of remuneration have been valued in accordance with Australian Accounting Standards AASB 2, using the Binomial Valuation Methodology. The value of the options is determined on the grant date and is included in remuneration on a proportionate basis from grant date to vesting date. Details of options issued, exercised, and lapsed is contained in Note 35.

Note 32 SubsidiariesCountry of

IncorporationPercentare of

Shares / Units Held

2010 % 2009 %Parent Entity

UXC Limited 1, 2 Australia

Subsidiaries of UXC Limited

Fieldforce Services Pty Ltd 1, 2 Australia 100 100

Golden Hills Mining Services Pty Limited 1 Australia 100 100

Lucid IT Pty Ltd 1 Australia 100 100

Red Rock Consulting Pty Ltd 1, 2 Australia 100 100

Smartvision (International) Pty Limited (in voluntary liquidation) Australia 100 100

Utility Services Corporation Limited 1, 2 Australia 100 100

UXC BSG Holdings Pty Ltd 3 Australia 100 -

UXC Defence Pty Ltd 1 Australia 100 100

UXC Engineering Solutions Pty Ltd (formerly Hyper One Pty Ltd) 1 Australia 100 100

UXC FSG Holdings Pty Ltd 4 Australia 100 -

UXC Connect Pty Ltd (formerly UXC Getronics Australia Pty Ltd) 1, 2, 11 Australia 100 100

UXC Holdings Pty Ltd 1 Australia 100 100

UXC Professional Solutions Holdings Pty Ltd (formerly e-Data Holdings Pty Ltd) 1,10 Australia 100 100

UXC Solutions Pty Ltd 5 Australia 100 -

Subsidiaries of Eclipse Computing (Australia) Pty Ltd

Eclipse eOne Pty Ltd 1 Australia 100 100

Eclipse Intelligent Solutions (Canada) Ltd 8 Canada 100 -

Subsidiaries of Gibson Quai-AAS Pty Ltd

AAS Consulting Pty Ltd 1 Australia 100 100

Telecommunications Consultants Pty Limited 1 Australia 100 100

Telecommunications Consultants Unit Trust 1 Australia 100 100

Subsidiary of ILID Pty Ltd

Shelfmade Pty Limited 1 Australia 100 100

Subsidiary of ILID Systems Pty Limited

ILID No. 2 Pty Ltd 1 Australia 100 100

Subsidiary of Infrastructure Constructions Pty Ltd

Trenchless Group Pty Ltd (formerly e-Storage Direct Pty Ltd) 1 Australia 100 100

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Shares / Units Held

2010 % 2009 %Subsidiaries of Integ Group Pty Ltd 1,2

C4 Systems Pty Ltd 1 Australia 100 100

Integ Communication Solutions Pty Ltd 1, 2 Australia 100 100

Integ Queensland Pty Ltd (formerly Lanlink Pty Ltd) 1 Australia 100 100

Pacific Consulting (Qld) Pty Ltd 1 Australia 100 100

Pinedawn Pty Ltd 1 Australia 100 100

Walan Systems Pty Ltd 1 Australia 100 100

Subsidiaries of Lucid IT Pty Ltd

Lucid IT Pte Ltd Singapore 100 100

Lucid IT Snd Bhd Malaysia 100 100

Subsidiary of Oxygen Business Solutions Pty Ltd

Oxygen Express Pty Ltd 1 Australia 100 100

Subsidiary of Planpower Pty Limited

Australian College of Project Management Pty Ltd 1 Australia 100 100

Subsidiaries of QSP Asia Pacific Pty Ltd

e-BI Solutions Pty Limited 1 Australia 100 100

e.Fab Pty Ltd 1 Australia 100 100

UXC Performance Management Pty Ltd 1 Australia 100 100

Subsidiaries of Red Rock Consulting Pty Ltd

Rocksolid SQL Pty Ltd (formerly BML & Associates Pty Ltd) 1,9 Australia 100 100

Glue AP Pty Ltd 1,6 Australia 100 -

Jigsaw Services Pty Ltd 1 Australia 100 100

Red Rock Enterprises Ltd New Zealand 100 100

Subsidiary of Skilltech Consulting Services Pty Ltd

UXC Metering Solutions Pty Ltd 1 Australia 100 100

Subsidiaries of Utility Services Corporation Limited

ACN 003 684 679 Pty Ltd (in voluntary liquidation) 1 Australia 100 100

Agave Software Pty Ltd 1 Australia 100 100

AIT Unit Trust 1 Australia 100 100

Australian Information Technology Pty Limited 1 Australia 100 100

Datec (Qld) Pty Ltd 1 Australia 100 100

e.sens Pty Ltd 1 Australia 100 100

Eclipse Computing (Australia) Pty Ltd 1, 2 Australia 100 100

Gibson Quai-AAS Pty Ltd 1 Australia 100 100

ILID Pty Limited 1 Australia 100 100



Shares / Units Held

2010 % 2009 %ILID Systems Pty Limited 1 Australia 100 100

Infrastructure Construction Pty Ltd 1, 2 Australia 100 100

Insulaction Pty Ltd (formerly e.inform Pty Ltd) 1, 14, 15 Australia 100 100

Integ Group Pty Ltd (formerly eDD Holdings Pty Ltd) 1, 2 Australia 100 100

Oxygen Business Solutions Pty Ltd 1, 2 Australia 100 100

Planpower Pty Limited 1, 2 Australia 100 100

Planpower Training Solutions Pty Ltd 1 Australia 100 100

QSP Asia Pacific Pty Ltd 1, 2 Australia 100 100

Skilltech Consulting Services Pty Limited 1, 2 Australia 100 100

TechComm Power International Pty Limited 1 Australia 100 100

Tracepot Pty Limited (in voluntary liquidation) 1 Australia 100 100

U-tel Communications Pty Ltd Australia 75 75

U-tel Communications Unit Trust Australia 75 75

UXC Applications Development Pty Ltd (formerly Dytech Solutions Pty Ltd) 1,13 Australia 100 100

UXC Consulting Pty Ltd (formerly UXC Management Consulting Pty Ltd) 1,21 Australia 100 100

UXC Information Management Pty Ltd (formerly BCT Group Pty Ltd) 1,20 Australia 100 100

UXC Retail Solutions Pty Ltd (formerly ACN 060 334 563 Pty Ltd) 1,19 Australia 100 100

Vision Energy Pty Ltd 1, 2 Australia 100 100

Subsidiaries of UXC BSG Holdings Pty Ltd

UXC Cloud Consulting Pty Ltd 16 Australia 100 -

UXC Cloud Solutions Pty Ltd 17 Australia 100 -

Opticon Pty Ltd 18 Australia 100 -

Subsidiary of UXC Engineering Solutions Pty Limited

Energy Assessors Australia Pty Ltd 12 Australia 100 100

Subsidiary of UXC Holdings Pty Ltd

UXC Holdings (NZ) Ltd New Zealand 100 100

Subsidiaries of UXC Holdings (NZ) Ltd

Eclipse New Zealand Limited New Zealand 100 100

Oxygen Business Solutions Limited New Zealand 100 100

Red Rock Limited (formerly Sequel Software Limited) New Zealand 100 100

Subsidiary of UXC Performance Management Pty Ltd

e.Prise Pty Ltd 1 Australia 100 100

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Note 32 Subsidiaries (continued)Country of


Shares / Units Held

Subsidiaries of UXC Professional Solutions Holdings Pty Ltd 10 (formerly e-Data Holdings Pty Ltd)UXC Professional Solutions Pty Ltd (formerly Ingena Group Limited) 1,7 Australia 100 100

e-Data Care Pty Limited 1, 2 Australia 100 100

XSI Data Solutions Pty Limited 1, 2 Australia 100 100

Subsidiaries of UXC Professional Solutions Pty Ltd 7 (formerly Ingena Group Ltd)Optimise IT Holdings Pty Ltd Australia 100 100

Optimise IT Pty Ltd Australia 100 100

Optimise Unit Trust Australia 100 100

VAK Consulting Pty Ltd Australia 100 100

Subsidiaries of Vision Energy Pty LtdMorgan Facilities Management Pty Ltd 1 Australia 100 100MPI Contracting Pty Ltd 1 Australia 100 100Precision Pipes and Cables Pty Ltd 1 Australia 100 100

Subsidiary of ACN 003 684 679 Pty Ltd (in voluntary liquidation)Megadata Pty Limited (in voluntary liquidation) Australia 100 100

1 These entities are members of the tax-consolidated group. UXC Limited is the head entity within the tax-consolidated group.

2 These wholly-owned subsidiaries have entered into a deed of cross guarantee with UXC Limited pursuant to ASIC Class Order 98/1418 and are relieved from the requirement to prepare and lodge an audited financial report.

3 UXC BSG Holdings Pty Ltd was incorporated by UXC Ltd on 14 April 2010.4 UXC FSG Holdings Pty Ltd was incorporated by UXC Ltd on 20 May 2010.5 UXC Solutions Pty Ltd was incorporated by UXC Ltd on 4 April 2010.6 Glue AP Pty Ltd acquired by Red Rock Consulting Pty Ltd on 10 September 2009.7 Ingena Group Limited changed its name to UXC Professional Solutions Pty Ltd on 7 August 2009.8 Eclipse Intelligent Solutions (Canada) Ltd was incorporated by Eclipse Computing (Australia) Pty Ltd on 16 July 2009.9 BML & Associates Pty Ltd changes its name to Rocksolid SQL Pty Ltd on 29 April 2010.10 e-Data Holdings Pty Limited changed its name to UXC Professional Solutions Holdings Pty Ltd during the financial

year ended 30 June 2009. 11 Getronics Australia Pty Ltd changed its name to UXC Getronics Australia Pty Ltd during the financial year ended

30 June 2009. UXC Getronics Australia Pty Ltd changed its name to UXC Connect Pry Ltd on 31 May 2010.12 Ownership of Energy Assessors Australia Pty Ltd changed from Fieldforce Services Pty Ltd to UXC Engineering

Solutions Pty Ltd during the financial year ended 30 June 2009. 13 Dytech Solutions Pty Ltd changed its name to UXC Applications Development Pty Ltd during the financial year

ended 30 June 2009. 14 e.inform Pty Ltd changed its name to Insulaction Pty Ltd during the financial year ended 30 June 2009. 15 Ownership of Insulaction Pty Ltd changed from UXC Performance Management Pty Ltd to Utility Services

Corporation Limited during the financial year ended 30 June 2009. 16 UXC Cloud Consulting Pty Ltd was incorporated by UXC Ltd on 23 April 2010.17 UXC Cloud Solutions Pty Ltd was incorporated by UXC Ltd on 23 April 2010.18 Opticon Pty Ltd was incorporated by UXC Ltd on 22 June 2010.19 ACN 060 334 563 Pty Ltd changed its name to UXC Retail Solutions Pty Ltd on 31 May 2010.20 BCT Group Pty Ltd resolved to change its name to UXC Information Management Pty Ltd on 27 August 2009.21 UXC Management Consulting Pty Ltd changed its name to UXC Consulting Pty Ltd on 12 March 2010.

The consolidated statement of comprehensive income and statement of financial position of entities which are party to the deed of cross guarantee are:

(a) Statement of Comprehensive Income2010 $000

2009 $000

Revenue 608,857 589,108

Other income 745 635

Services and products used (145,060) (143,916)

Employee benefits expense (242,550) (243,546)

Contractor and sub-contractor expense (112,210) (86,490)

Licence fee expense (11,949) (13,802)

Travel expenses (8,462) (9,676)

Occupancy expenses (8,745) (10,121)

Vehicle and equipment running costs (19,538) (16,566)

Professional services expense (9,878) (10,424)

Depreciation and amortisation expense (10,019) (8,801)

Communication expenses (6,359) (5,446)

Finance charges (8,995) (9,163)

Advertising and marketing costs (2,737) (1,577)

Insurance costs (2,243) (2,154)

Recruitment and staff training costs (2,689) (3,157)

Operating lease cost (3,020) (2,426)

Impairment of investment in listed corporations - (317)

Other expenses (21,884) (14,686)

Profit on disposal of business 4,758 -

Profit / (loss) before income tax expense (1,978) 7,475

Income tax expense (113) (1,426)

Profit / (loss) for the year (2,091) 6,049

Other comprehensive income

Gain / (loss) on interest rate cash flow hedges taken to equity 1,233 (2,173)

Total comprehensive income / (loss) for the year (858) 3,876

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(b) Statement of Financial Position2010 $000

2009 $000

Current assetsCash and cash equivalents 28,267 24,433Trade and other receivables 265,048 214,179Inventories 13,189 15,676Current tax assets 3,930 1,866Other 14,553 15,017Total current assets 324,987 271,171Non-current assetsTrade and other receivables 10,388 4,887Investments accounted for using the equity method 4,259 4,217Other financial assets 41,649 47,510Property, plant and equipment 23,551 27,386Goodwill 89,870 90,203Other intangible assets 7,349 6,257Deferred tax assets 1,439 1,526Other 265 604Total non-current assets 178,770 182,590Total assets 503,757 453,761Current liabilitiesTrade and other payables 87,886 94,640Unearned income 23,991 24,712Borrowings 25,747 18,056Provisions 16,493 15,167Other 144,217 76,330Total current liabilities 298,334 228,905Non-current liabilitiesBorrowings 49,609 67,502Unearned income 808 215Provisions 3,912 4,073Other 354 1,534Total non-current liabilities 54,683 73,324Total liabilities 353,017 302,229Net assets 150,740 151,532EquityIssued capital 168,749 152,493Reserves (675) 5,398Retained earnings1 (17,334) (6,359)Total equity 150,740 151,532

2010 $000

2009 $000

1 Retained earnings

Retained earnings as at beginning of the financial year (6,359) (1,690)

Net profit (2,091) 6,049

Dividends provided for or paid (8,884) (10,718)

Retained earnings as at end of the financial year (17,334) (6,359)

Note 33 Acquisitions of BusinessesThe following acquisitions were made during the financial year:

Name of entity / business Principal activity Date control gainedProportion of shares acquired

Glue AP Pty Ltd IT Consulting 10 September 2009 100%

MXL IT Consulting 14 May 2010 Business and assets

Acquisitions for the previous corresponding period:

■ Datec Queensland

■ Ingena Group Limited

Goodwill on acquisition represents the future benefits of acquiring suitably qualified workforces, typically found with services businesses, specialising in particular technologies and systems.

Included in the result for the year is a profit for the period of $604,000 attributable to the above acquisitions. Had these business combinations been effected at 1 July 2009, the revenue of the consolidated entity would have been approximately $680,521,000 and the net loss would have been approximately $2,751,000.

Other intangible assets represent the fair value of contracts and customer relationships at acquisition date.

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Note 33 Acquisitions of Businesses (continued)Details of the acquisitions are as follows:

2010 $000

2009 $000

Consideration

1,080 Cash1 1,321

1,591 Share capital and options 16,047

806 Deferred consideration 688

-Deferred consideration recognised directly in equity 3,750

3,477 21,806

Book valueFair value

adjustment

Fair value on

acquisitionFair value of net assets acquired 2 Book value

Fair value adjustment

Fair value on

acquisition

Current assets

259 - 259 Cash and cash equivalents 2,922 - 2,922

364 - 364 Trade and other receivables 4,592 - 4,592

57 - 57 Other 16 - 16

680 - 680 Total current assets 7,530 - 7,530

Non-current assets

30 - 30Property, plant and equipment 90 - 90

1,000 - 1,000 Other intangible assets - - -

- - - Deferred tax assets 456 - 456

1,030 - 1,030 Total non-current assets 546 - 546

1,710 - 1,710 Total assets 8,076 - 8,076

Current liabilities

191 - 191 Trade and other payables 2,297 - 2,297

- - - Deferred consideration 2,284 - 2,284

- - - Unearned income 4 - 4

15 - 15 Current tax liabilities 1,322 - 1,322

45 - 45 Provisions 305 - 305

251 - 251 Total current liabilities 6,212 - 6,212

Non-current liabilities

- - - Provisions 16 - 16

- - - Total non-current liabilities 16 - 16

251 - 251 Total liabilities 6,228 - 6,228

1,459 - 1,459Net assets / (liabilities) acquired 1,848 - 1,848

2,018 Goodwill on acquisition 19,958

1 Includes incidental costs of $618,034 for 2009.

2 The fair value of the identifiable assets, liabilities and contingent liabilities of the above acquisitions have been provisionally determined for the current financial year.

Note 34 Segment InformationThe Group operates predominantly in Australia. Revenue from foreign countries is not material to the Group. No single external customer generates 10% or more of the Group’s revenue. The Group operates in the following segments:

Business Solutions Group

Provides market-leading information, communication and technology (ICT) solutions and services to medium and large corporates and governments. The Group has three service and solution focus areas: Consulting, Applications and Infrastructure.

Professional Solutions Group

Provides management consulting, software and systems integration and technical services to industry and government.

Field Solutions Group

Engaged in asset and data management for utilities, including asset inspection, management and maintenance services; water conservation, energy saving, and other environmental services; the provision of utility meter installation and reading services; and related data management and GIS services.

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Industry Segments Business Solutions Professional Solutions Field Solutions Consolidated2010 $000

2009 $000

2010 $000

2009 $000

2010 $000

2009 $000

2010 $000

2009 $000

Continuing OperationsSales to external customers 424,392 439,589 31,843 15,449 212,221 178,702 668,456 633,740Inter-segment sales 11,455 508 - - - - 11,455 508Total sales revenue 435,847 440,097 31,843 15,449 212,221 178,702 679,911 634,248Other revenue 5,803 187 234 83 257 598 6,294 868Unallocated and eliminations - - - - - - (705) 2,814Discontinued operations - - - - 62,793 77,157 62,793 77,157Total segment revenue 441,650 440,284 32,077 15,532 275,271 256,457 748,293 715,087Segment result – continuing operations 32,920 16,915 5,172 4,289 (57) 2,798 38,035 24,002Unallocated revenue less unallocated expenses (14,819) (14,521)Profit before income tax expense 23,216 9,481Income tax expense (2,712) (1,209)Profit for the financial year 20,504 8,272Impairment of investment in listed corporations - (317)Impairment of non current assets (1,905) (590)Net profit from continuing operations 18,599 7,365Net profit / (loss) from discontinued operations (21,471) 6,512Net profit / (loss) attributable to members of the parent entity (2,872) 13,877Segment assets 2 252,724 242,574 23,409 24,080 109,947 129,147 386,080 395,801Unallocated assets 61,271 57,437Total assets 447,351 453,238Segment liabilities 135,298 123,121 2,932 6,469 48,791 55,600 187,021 185,190Unallocated liabilities 67,055 76,780Total liabilities 254,076 261,970Property, plant and equipment, intangibles and other non current assets 1

Acquisitions by segment 5,123 9,165 56 76 5,728 7,465 10,907 16,706Unallocated acquisitions 1,595 30Total acquisitions 12,502 16,736Acquired from business acquisitions 1,030 - - 77 - 13 1,030 90Depreciation and amortisation expenseFrom continuing operations 5,063 5,543 43 17 6,825 4,655 11,931 10,215From discontinued operations - - - - 201 193 201 193Unallocated depreciation and amortisation expense 22 357Total depreciation and amortisation expense 12,154 10,765Other non cash expensesFrom continuing operations 1,366 829 (19) (60) 1,530 224 2,877 993From discontinued operations - - - - 704 - 704 -

1 Excludes assets acquired by means of acquisition of businesses

2 Includes associate entities

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Note 35 Related Party DisclosuresThe names of each person holding the position of Director of the Company during the financial year together with details of Directors’ remuneration, superannuation and retirement payments are set out at Note 31.

Apart from the details disclosed in this note, no Director has entered into a contract with the Company or the Group since the end of the previous financial year and there were no contracts involving Directors’ interests existing at year end other than the contracts disclosed in the Directors’ Report.

Key Management Personnel Holdings of Shares

The interests of Key Management Personnel in the Company and their related entities in shares of the Company at year-end and movements during the year are set out below. Key Management Personnel had no interest in entities within the Group.

Shares held 30 June 2009 Shares Sold

Options Exercised Acquired

Shares held 30 June 2010

2010 No. No. No. No. No.

Geoffrey Lord 14,572,905 - 1,450,091 2,377,114 18,400,110

Geoffrey Cosgriff 3,818,365 - 301,365 411,974 4,531,704

Kingsley Culley 1,465,907 - 144,191 161,010 1,771,108

Jean-Marie Simart 413,292 - 38,929 45,222 497,443

Ron Zammit 3,085,865 - 97,240 318,311 3,501,416

Cris Nicolli 2,198,500 - 175,497 301,105 2,675,102

Michael Waymark 274,000 24,000 25,000 82,500 357,500

Paul Fielding 4,280,511 1,697,081 428,051 1,493,712 4,505,193

Ralph Pickering 3,947,405 160,000 347,431 409,306 4,544,142

Mark Hubbard 1,396,005 100,000 132,401 142,841 1,571,247

35,452,755 1,981,081 3,140,196 5,743,095 42,354,965

Shares held 30 June 2009 Shares Sold

Options Exercised Acquired

Shares held 30 June 2010

2009 No. No. No. No. No.

Geoffrey Lord 2,524,634 - - 12,048,271 14,572,905

Geoffrey Cosgriff 3,794,365 - - 24,000 3,818,365

Kingsley Culley 1,441,907 - - 24,000 1,465,907

Jean-Marie Simart 389,292 - - 24,000 413,292

Ron Zammit 3,061,865 - - 24,000 3,085,865

Cris Nicolli 2,406,000 303,500 - 96,000 2,198,500

Michael Waymark - - - 274,000 274,000

Paul Fielding - 24,000 - 4,304,511 4,280,511

Ralph Pickering 4,007,051 83,646 - 24,000 3,947,405

Mark Hubbard 1,487,170 163,165 - 72,000 1,396,005

19,112,284 574,311 - 16,914,782 35,452,755

Key Management Personnel Holdings of Share Options 2010

The interests of Key Management Personnel in the Company and their related entities in options over shares of the Company at year-end and movements during the year are set out below:

Options held

30 June 2009

Options Issued

Options Exercised

Options Lapsed

Options held

30 June 2010

Balance vested and exercisable

30 June 2010

Options vested during

year

2010 No. No.1 No. No. No. No. No.1

Geoffrey Lord 2,850,091 1,529,506 (1,450,091) (2,929,506) - - 1,450,091

Geoffrey Cosgriff 379,437 - (301,365) (78,072) - - 379,437

Kingsley Culley 144,191 - (144,191) - - - 144,191

Jean-Marie Simart 38,929 - (38,929) - - - 38,929

Ron Zammit 306,187 - (97,240) (208,947) - - 306,187

Cris Nicolli 387,916 445,614 (175,497) (384,941) 273,092 - 210,250

Michael Waymark 525,000 347,633 (25,000) (297,633) 550,000 550,000 575,000

Paul Fielding 428,051 - (428,051) - - - 428,051

Ralph Pickering 599,941 346,535 (347,431) (380,603) 218,442 - 389,941

Mark Hubbard 272,401 330,235 (132,401) (279,019) 191,216 - 132,401

5,932,144 2,999,523 (3,140,196) (4,558,721) 1,232,750 550,000 4,054,478

1 Options issued in FY09 and vested and exercised in FY10 are pursuant to the Prospectus dated 27 March 2009 for an offer, at no cost to shareholders, of one Bonus Option for every ten shares held on the record date of 14 April 2009. None of this pro-rata securities distribution to all shareholders was issued to executives as a component of remuneration. Options issued also includes adjustment for the 1 for 10 bonus issue of shares granted to all shareholders and allotted on 28 April 2010.

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Key Management Personnel Holdings of Share Options 2009

Options held

30 June 2008

Options Issued

Options Exercised

Options Lapsed

Options held

30 June 2009

Balance vested and exercisable

30 June 2009

Options vested during

year

2009 No. No.1 No. No. No. No. No.

Geoffrey Lord 1,400,000 1,450,091 - - 2,850,091 1,400,000 -

Geoffrey Cosgriff - 379,437 - - 379,437 - -

Kingsley Culley - 144,191 - - 144,191 - -

Jean-Marie Simart - 38,929 - - 38,929 - -

Ron Zammit - 306,187 - - 306,187 - -

Cris Nicolli 355,333 210,250 - (177,667) 387,916 177,666 -

Michael Waymark 500,000 25,000 - - 525,000 - -

Paul Fielding - 428,051 - - 428,051 - -

Ralph Pickering 420,000 389,941 - (210,000) 599,941 210,000 -

Mark Hubbard 280,000 132,401 - (140,000) 272,401 140,000 -

2,955,333 3,504,478 - (527,667) 5,932,144 1,927,666 -

Key Management Personnel exercised 3,140,196 options during the year at an exercise price of $0.45 per share (2009: Nil) 4,558,721 options lapsed during the year (2009: 527,667).

No amounts remain unpaid on the options exercised during the financial year at year end.

Loans to Key Management Personnel

Loans are provided to Key Management Personnel as part of the Long Term Incentive share-based payment plan (note 29). At 30 June 2010 the balance of these loans was $1,906,250 (2009: $1,906,250) comprising loans to C Nicolli $875,000 (2009: $875,000), M Hubbard $687,500 (2009: $687,500), R Pickering $343,750 (2009: $343,750). There is no interest payable on the loans. The loans are due to be repaid when the underlying shares cease to be restricted shares.

Other Transactions with Key Management Personnel

Profit for the year includes the following items of revenue and expense that resulted from transactions, other than compensation, loans or equity holdings, with key management personnel or their related entities. Each of the transactions was on normal terms and conditions of trading.

2010 $000

2009 $000

Revenue from rendering of services 246 690

Purchases of services and products 147 160

Wholly-Owned Group

The ultimate parent entity in the wholly owned group is UXC Limited. Details of interests in wholly owned subsidiaries are set out at Note 32. The aggregate amounts receivable/payable from/to wholly owned subsidiaries by the Company are set out at Notes 4 and 8. The Directors have elected for wholly-owned Australian entities within the group to be taxed as a single entity from 13 September 2002 (refer Note 3(f)).

Note 36 Notes to the Cash Flow Statement

(a) Reconciliation of profit / (loss) for the year to net cash flows from operating activities

2010 $000

2009 $000

Profit / (loss) after tax for the year (2,872) 13,877

Depreciation and amortisation 12,155 10,765

(Profit) / loss on disposal of plant and equipment 1,171 131

(Profit) / loss on disposal of investments - (56)

(Profit) / loss on disposal of business (4,758) -

Equity settled share-based payment 229 406

Unrealised foreign exchange (gains) / losses (957) 65

(Increase) / decrease in current tax asset (3,483) (7,416)

(Increase) / decrease in deferred tax asset (6,074) 2,860

Impairment of investment in listed corporations - 317

Impairment of non-current assets 2,335 590

Share of associates’ profit (252) (626)

Changes in operating assets and liabilities net of the effects of purchases of businesses

(Increase) / decrease in trade and other receivables (5,713) 658

(Increase) / decrease in accrued income 25,508 (14,496)

(Increase) / decrease in inventories 2,616 1,323

(Increase) / decrease in other assets 455 (2,049)

Increase / (decrease) in trade and other payables 2,263 6,262

Increase / (decrease) in unearned income 2,939 3,575

Increase / (decrease) in provision for employee benefits 2,298 185

Increase / (decrease) in other provisions 96 (659)

Net cash inflow / (outflow) from operating activities 27,956 15,712

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Note 36 Notes to the Cash Flow Statement (continued)

2010 $000

2009 $000

(b) Acquisition of businesses

Outflow of cash to acquire businesses, net of cash acquired

Cash consideration (refer Note 33) 1,080 1,321

Less: Cash balances acquired (259) (2,922)

821 (1,601)

(c) Non-cash financing and investing activities

Acquisition of businesses by means of share and option issues 1,591 16,047

Deferred consideration by means of share and option issues 6,312 810

Acquisition of assets by means of finance leases 1,439 5,361

(d) Financing facilities

The Group has access to the following lines of credit:

Total facilities available (secured)

Bank overdraft 6,000 6,000

Commercial bills 93,771 93,660

Bank guarantee facility 18,500 20,500

118,271 120,160

Facilities utilised at balance date

Bank overdraft - -



79,647 88,919

Facilities not utilised at balance date

Bank overdraft 6,000 6,000



38,624 31,241

Bank Overdraft

Interest on bank overdraft is determined with reference to the bank’s variable lending indicator (‘Benchmark’) rate. The bank overdraft is part of a set-off agreement and is subject to periodic review.

Commercial Bills

Interest on commercial bills is determined with reference to the Bank Bill Swap Yield (BBSY) on the day of the drawdown.

Note 37 Financial Instruments

(a) Significant Accounting Policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect to each category of financial asset and financial liability are disclosed in Note 1 to the financial statements.

(b) Categories of Financial Instruments

2010 $000

2009 $000

Financial Assets

Cash 37,758 29,511

Trade receivables 151,453 166,952

Available for sale financial assets 6 4

Financial Liabilities

Financial liabilities at amortised cost (218,176) (224,131)

Derivative instruments in designated hedge accounting relationship at fair value (683) (1,918)

Derivative instruments at fair value through profit and loss 11 (67)

(c) Financial Risk Management Objectives

The Group’s Corporate division monitors and manages the financial risks relating to the operations of the Group through internal risk reports, which analyses exposures to risks. These risks include:

■ Market risk (including currency risk, interest rate risk, price risk);

■ Credit risk;

■ Liquidity risk.

The Group seeks to minimise the effects of these risks by using various financial instruments to hedge these exposures. The use of financial instruments is governed by the Group’s Policies and Procedures approved by the Board. The Group does not enter into or trade financial instruments for speculative purposes.

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(d) Market Risk

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group enters into derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

■ Forward foreign exchange contracts to hedge exchange rate risk arising on the import of goods and services from overseas; and

■ Interest rate swaps and collars to mitigate the risk of rising interest rates.

There has been no material change from the prior year to the company’s and the Group’s exposure to market risk or in the matter to which the risks are managed and measured.

(e) Foreign Currency Risk Management

Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to foreign exchange risk arises from:

■ Net investment in New Zealand operations;

■ Net investment in Canadian operations;

■ Undertaking certain transactions denominated in foreign currencies.

The carrying amount of the Group’s foreign currency denominated assets and liabilities at the reporting date is as follows:

Assets $000 Liabilities $000

Currency 2010 2009 2010 2009

Canadian dollars (CAD) 2,520 - (1,013) -

Fiji dollars (FJD) 506 394 - -

New Zealand dollars (NZD) 20,112 22,935 (6,952) (7,780)

US dollars (USD) 283 2,331 - -

Foreign Currency Sensitivity

The Group is mainly exposed to New Zealand Dollars and Canadian Dollars. The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian Dollar against the New Zealand Dollar and Canadian Dollar. The sensitivity analysis only includes outstanding foreign currency denominated items and adjusts their translation at year end for a 10% change in foreign currency rates. A positive number indicates an increase where the Australian Dollar weakens against the New Zealand Dollar and/or Canadian Dollar.

Impact of change in foreign currency

AUD $000

Account 2010 2009

Profit or loss 174 30

Receivables from New Zealand subsidiaries 619 1,062

Receivables from Canadian subsidiaries 55 -

The Group’s sensitivity to foreign currency has not changed materially from the prior year.

Foreign Exchange Contracts

The Group enters into forward foreign exchange contracts to cover specific foreign currency payments on behalf of entities within the Group. These are usually of a short-term nature (less than three months). The following table details the Group’s forward foreign currency contracts outstanding as at reporting date:

Average Exchange Rate

Principal Amount $000

Fair Value $000

2010 2009 2010 2009 2010 2009

Buy US Dollars

Less than three months 0.8548 0.7887 3,564 2,409 11 (67)

The above foreign exchange contracts were not designated as hedges and consequently, gains or losses are recognised in the profit or loss.

(f) Interest Rate Risk Management

Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Group is exposed to interest rate risk as entities in the Group borrow funds at floating rates. The risk is managed by the Group through the use of interest rate swap contracts and cap and floor interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite; ensuring optimal hedging strategies are applied by protecting interest expense through different interest rate cycles.

Interest Rate Sensitivity

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel.

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Note 37 Financial Instruments (continued)At reporting date, if interest rates had been 100 basis point higher / lower and all other variables were held constant:

■ The Group’s net profit and equity would decrease / increase by $29,000 (2009: decrease / increase by $64,000).

This is attributable to the Group’s exposure to interest rates on its variable rate borrowings.

The Group’s sensitivity to interest rates has reduced during the current year due a decrease in variable rate debt instruments.

Interest Rate Swap Contracts

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the cash flow exposures on the variable rate borrowings. The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at reporting date and the credit risk inherent in the contract, and are disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.

The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding as at reporting date for the Group.

Outstanding Floating for Fixed Rate Contracts

Average Fixed Interest Rate

Notional Principal Amount

Fair Value

2010 %

2009 %

2010 $000

2009 $000

2010 $000

2009 $000

Less than 1 year 6.9% 6.6% 14,800 4,800 - -

1 to 4 years 6.7% 6.8% 25,100 35,100 (683) (1,918)

The interest rate swaps settle on a quarterly basis. The floating rate on the interest rate swaps is the Australian BBSW. The Group settles the difference between the fixed and floating interest rate on a net basis.

All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Group’s cash flow exposure resulting from variable interest rates on borrowings. The interest rate swaps and the interest payments on the loan occur simultaneously and the amount deferred in equity is recognised in profit or loss over the period the floating interest payments on debt impact profit or loss.

(g) Other Price Risk

Other price risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from foreign currency risk

or interest rate risk). The Group is exposed to equity price risk arising from its equity investment. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

Equity Price Sensitivity

The Group has no exposure to equity price risk at the reporting date [2009: nil exposure].

(h) Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The Group has a policy of only dealing with credit worthy counterparties as a means of mitigating the risk of financial loss from defaults. The Group does not have any significant credit risk exposure to any single counter party or any group of counter parties having similar characteristics.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

Trade receivables consist of a large number of customers, spread across diverse industries. Ongoing credit evaluation is performed on the financial condition of receivables.

The carrying amount of financial assets recorded in the financial statements, net of any allowances, represents the Group’s exposure to credit risk.

(i) Liquidity Risk Management

Liquidity risk refers to the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities. Ultimate responsibility for liquidity risk management rests with the board of directors, who has built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements.

The Group manages liquidity risk by:

■ Maintaining adequate reserves and banking facilities. Refer to note 36(d) for details of the Group’s unused facilities;

■ Continuously monitoring forecast and actual cash flows;

■ Matching the maturity profiles of financial assets and liabilities.

The following table details the Group’s remaining contractual maturity for its derivative and non-derivative financial liabilities and deferred consideration to be settled in cash. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both principal and interest cash flows.

There were no financial guarantee contracts in place at the end of the year (2009: Nil).

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Liquidity Table – Financial Liabilities

Average Interest Rate Within 1 year 1 to 5 years Total

2010 % $000 $000 $000


Non-interest bearing liabilities 138,007 5,090 143,097

Finance lease liability 8.3% 5,898 7,235 13,133

Variable interest rate instruments 5.8% 22,095 3,469 25,564

Fixed interest rate instruments 6.8% 16,933 25,422 42,355

182,933 41,216 224,149

2009


Non-interest bearing liabilities 135,608 5,406 141,014

Finance lease liability 8.4% 5,623 10,710 16,333

Variable interest rate instruments 5.2% 15,772 18,251 34,023

Fixed interest rate instruments 6.6% 2,644 42,386 45,030

159,647 76,753 236,400

The following table details the Group’s liquidity analysis for its derivative financial instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period.

Liquidity Table – Derivative Instruments

Within 1 year 1 to 5 years Total

2010 $000 $000 $000

Derivative instruments 591 92 683

2009

Derivative instruments 1,085 833 1,918

(j) Fair Value of Financial Instruments

The fair values of financial assets and financial liabilities are determined as follows:

■ The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices;

■ The fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions;

■ The fair value of derivative instruments, are calculated using quoted prices, which is a level 2 fair value measurement. Where such prices are not available use is made of discounted cash flow analysis using the applicable yield curve for the duration of the instruments for non-optional derivatives.

The directors consider that the carrying amounts of financial assets and financial liabilities recorded

at amortised cost in the financial statements approximates their fair values.

Note 38 Capital Risk Management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall capital risk management strategy remains unchanged from the prior year.

The capital structure of the Group consists of: ■ Cash; ■ Debt, comprising the borrowings disclosed in notes 16 and 19; and ■ Equity, comprising issued capital, reserves and retained profits as disclosed in notes 22, 23

and 24 respectively.

The Group operates through a number of entities. None of the Group entities are subject to externally imposed capital requirements.

Gearing Ratio

The Group’s senior finance team review the capital structure on a monthly basis. As a part of this review the team considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the senior finance team the Board balances the overall capital structure of the Group through the payment of dividends, new share issues (including shares issued as consideration for business acquisitions) and share buy-backs as well as the issue of new debt or the redemption of existing debt.

The Group’s capital management measures include: ■ gearing (net debt as a % of equity); and ■ interest cover (EBITDA ÷ net interest expense).

2010 2009

Net debt ($000) 39,007 57,707

Equity ($000) 193,275 191,268

Gearing (net debt ÷ equity) 20% 30%

Interest cover (EBITDA continuing operations ÷ net interest expense) 5 times 4 times

The Group complied with its external financial covenants for the year.

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Note 39 Parent Entity Disclosures

Notes2010 $000

2009 $000

(a) Financial position

Assets

Current assets 123,259 99,382

Non-current assets 140,513 140,980

Total assets 263,772 240,362

Liabilities

Current liabilities 30,150 17,326

Non-current liabilities 43,646 57,821

Total liabilities 73,796 75,147

Net assets 189,976 165,215

Equity

Issued capital 22 169,528 152,494

Reserves 23

Share-based payment reserve 579 579

Cash flow hedge reserve (683) (1,916)

Employee equity-settled benefit reserve 3,090 2,861

Deferred shares recognised directly in equity - 3,750

Retained earnings 17,462 7,747

Total equity 189,976 165,215

(b) Financial performance

Profit for the year 18,899 9,522

Other comprehensive income 1,233 (2,173)

Total comprehensive income 20,132 7,349

Guarantees entered into by the parent entity in relation to debts of its subsidiaries - -

Contingent liabilities of the parent entity 15,461 17,158

Commitments for the acquisition of property, plant and equipment of the parent entity - -

Note 40 Discontinued OperationsDiscontinued operations relate to business activities that were terminated during the year primarily in Field Solutions Group environmental sector associated with federal government programs. The underlying causes of the losses are complex and varied. They include rapidly changing market conditions and declining commodity prices in the renewable energy markets; unilateral and abrupt changes to government policy and the funding of programs in the environmental space; and changes to the cost base resulting from rapidly expanding then diminishing business activities.

The combined results of the discontinued operations included in the income statement are set out below. The comparative profit and cash flows from discontinued operations have been re-presented to include those operations classified as discontinued in the current period.

2010 $000

2009 $000

Profit / (loss) for the year from discontinued operations

Revenue 62,765 77,157

Other income 28 -

62,793 77,157

Expenses (93,466) (67,854)

Profit / (loss) before tax (30,673) 9,303

Income tax benefit / (expense) 9,202 (2,791)

Profit / (loss) from discontinued operations attributable to members of the parent entity (21,471) 6,512

Cash flows from discontinued operations

Net cash inflows / (outflows) from operating activities (21,452) (14,093)

Net cash inflows / (outflows) (21,452) (14,093)

Note 41 Subsequent EventsThere has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years. The strategic review announced in February 2010 is continuing and shareholders will be advised of reportable developments should they arise.

Final Dividend Declared

A dividend has not been declared for the year ended 30 June 2010.

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Directors’ Declaration

UXC Limited and SubsidiariesThe Directors declare that:

(a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;

(b) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in Note 1 Summary of Significant Accounting Policies to the financial statements;

(c) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity; and

(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee.

In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order applies, as detailed in Note 32 to the financial statements will, as a group, be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee.

Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.

On behalf of the Directors

Geoffrey F Lord Jean-Marie Simart Director Director

Melbourne 23 September 2010

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ASX Additional Information as at 23 September 2010

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this Report.

Distribution of ShareholdersUXC

Ordinary SharesUXC

IPS Shares

Number of Shares HeldNumber of

ShareholdersNumber of

Shareholders

1 - 1,000 3,169 11

1,001 - 5,000 3,290 136

5,001 - 10,000 1,447 44

10,001 - 100,000 2,898 64

100,001 and over 373 14

Total 11,177 269

Shareholders holding less than a marketable parcel 3,162 -

Twenty Largest Shareholders - UXC Ordinary SharesNumber of

Shares Held% of Issued

Capital

BELGRAVIA STRATEGIC EQUITIES PTY LTD 15,115,657 5.11%

J P MORGAN NOMINEES AUSTRALIA LIMITED 10,898,158 3.68%

CITICORP NOMINEES PTY LIMITED 10,857,266 3.67%

NATIONAL NOMINEES LIMITED 6,905,978 2.33%

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 4,065,152 1.37%

BT PORTFOLIO SERVICES LIMITED 3,850,301 1.30%

INFOCOS PTY LIMITED 3,278,788 1.11%

BOND STREET CUSTODIANS LIMITED 3,181,344 1.08%

BLOTT PTY LTD 3,026,844 1.02%

KEYGROWTH PTY LTD 2,437,448 0.82%

COGENT NOMINEES PTY LIMITED 2,413,103 0.82%

MR RALPH THOMAS PICKERING 2,338,650 0.79%

EONE INTEGRATED BUSINESS SOLUTIONS PTY LTD 2,134,384 0.72%

ZAMTEK PTY LTD 2,082,896 0.70%

MIRLEX PTY LTD 1,887,600 0.64%

MR GREGORY KEITH WOOLLETT 1,807,541 0.61%

CAMARGARDENS PTY LTD 1,771,108 0.60%

MR CRISTIANO NICOLLI 1,680,250 0.57%

BLOTT PTY LTD 1,613,324 0.55%

MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 1,561,560 0.53%

Total 82,907,352 28.03%

Twenty Largest Shareholders – UXC IPS SharesNumber of

Shares Held% of Issued

Capital

MS DIANNE MIOTLA 1,744,519 17.46%MR PAUL FIELDING 1,605,193 16.07%M & M AUGELLO PTY LTD 959,485 9.60%WATSON GROVE PTY LTD 959,485 9.60%KELFIELD INVESTMENTS PTY LTD 475,387 4.76%MR MICHAEL AUGELLO & MRS MAUREEN AUGELLO 260,864 2.61%

UXC LIMITED 242,350 2.43%MS VICTORIA ANNE KLUTH 212,500 2.13%MR DYLAN SMITH 210,813 2.11%MR PAUL RUBENS 136,550 1.37%DR LEON EUGENE PRETORIUS 125,000 1.25%MARIA SCODELLA 125,000 1.25%MARIE SCODELLA 125,000 1.25%BOND STREET CUSTODIANS LIMITED 105,000 1.05%MRS TANYA CHRISTINE MELVILLE 100,000 1.00%MR JASON DUNSTALL 100,000 1.00%BOND STREET CUSTODIANS LIMITED 95,000 0.95%MS SHARON LEE FAINI 85,000 0.85%YELRIF INVESTMENTS PTY LIMITED 85,000 0.85%HARRTOMM PTY LTD 74,000 0.74%Total 7,826,146 78.33%

Substantial ShareholdersUXC

Ordinary SharesUXC

IPS Shares

BELGRAVIA STRATEGIC EQUITIES PTY LTD 15,115,657 -

Unquoted Equity SecuritiesThere are unquoted options outstanding for 4,162,558 ordinary shares.

Class of Equity Securities and Voting Rights

UXC Ordinary Shares

There are 11,177 shareholders of ordinary shares in the Company.

There are 203 holders of options over ordinary shares.

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ASX Additional Information as at 23 September 2010

Note 1 Summary of Significant Accounting Policies 47Note 2 Profit from Continuing Operations 55Note 3 Income Taxes 55Note 4 Current Assets – Trade and Other Receivables and Accrued Income 57Note 6 Current Assets – Other Financial Assets 57Note 7 Current Assets – Other Assets 57Note 8 Non-Current Assets – Trade and Other Receivables 57Note 9 Non-Current Assets – Investments Accounted For Using The Equity Method 57Note 10 Non-Current Assets – Other Financial Assets 58Note 11 Non-Current Assets – Property Plant and Equipment 58Note 12 Non-Current Assets – Goodwill 59Note 13 Non-Current Assets – Other Intangible Assets 60Note 14 Non-Current Assets – Other Assets 60Note 15 Current Liabilities – Trade and Other Payables 60Note 16 Current Liabilities – Borrowings 60Note 17 Current Liabilities – Provisions 61Note 18 Other Liabilities 61Note 19 Non-Current Liabilities – Borrowings 61Note 20 Non-Current Liabilities – Provisions 61Note 21 Provisions 62

Note 22 Issued Capital 62Note 23 Reserves 64Note 24 Retained Profits 64Note 25 Earnings per Share 64Note 26 Dividends 65Note 27 Lease Commitments 66Note 28 Contingent Liabilities 66Note 29 Share Based Payments 66Note 30 Remuneration of Auditors 67Note 31 Key Management Personnel Remuneration 68Note 32 Subsidiaries 68Note 33 Acquisitions of Businesses 71Note 34 Segment Information 72Note 35 Related Party Disclosures 74Note 36 Notes to the Cash Flow Statement 75Note 37 Financial Instruments 76Note 39 Parent Entity Disclosures 80Note 40 Discontinued Operations 80Note 41 Subsequent Events 80

The voting rights attaching to the ordinary shares, set out in clause 7.8 of the Company’s Constitution, are subject to these articles and to any rights or restrictions attaching to any class of shares:

(a) Every Member may vote;

(b) On a show of hands every Member has one vote;

(c) On a poll every Member has:

(i) One vote for each fully paid share and each partly paid share held by him which was issued pursuant to a pro rata offer to persons entered in the Register or any branch register as the holder of ordinary shares or other securities in the Company which entitle their holders to participate in pro rata offers; and

(ii) A fraction of a vote for each contributing share equivalent to the proportion which the amount paid up bears to the total issue prices for the share.

There are no voting rights for options holders.

UXC IPS Shares

There are 269 shareholders of UXC IPS shares in the Company.

UXC IPS shares are unquoted shares in UXC ranking equally in all respects with ordinary UXC shares, except that UXC IPS shares may be entitled to additional UXC shares if UXC Professional Solutions (formerly Ingena) achieves certain profit targets at June 2009 and June 2010 as set out in UXC’s Bidder’s Statement for the acquisition of Ingena Group Limited dated 12 November 2008. All remaining UXC IPS shares will be reclassified as UXC shares on 30 September 2010.

Note Index

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UXC Corporate Directory

UXC LimitedABN 65 067 682 928

ACN 067 682 928

Directors

Executive Chairman

Geoffrey Lord


Geoffrey CosgriffKingsley CulleyJean-Marie SimartRon Zammit

Management Executives

Glenn Fielding Chief Executive Officer, Professional Solutions Group


Cris Nicolli Chief Executive Officer, Business Solutions Group



Registered OfficeLevel 3, 350 Collins Street Melbourne Vic 3000

GPO Box 4386 Melbourne Vic 3001

Telephone + 61 3 9224 5777 Facsimile + 61 3 9224 5778 Internet www.uxc.com.au

Share RegistryLink Market Services Level 4, 333 Collins Street Melbourne Vic 3000

Telephone 1300 554 474 Internet www.linkmarketservices.com.au

AuditorsDeloitte Touche Tohmatsu

SolicitorsFreehills

BankersNational Australia Bank

Stock ExchangeThe Company is listed on the Australian Stock Exchange (ASX).

UXC – A top three provider of choice for Business and ICT Solutions

* Australian owned

Source: Gartner IT Services Asia/Pacific Market Share, consulting services, May 2010

Rank Name Market share

1 IBM 11.0%2 Accenture 8.7%3 UXC* 6.5%4 CSC 5.2%5 PriceWaterhouseCoopers 4.8%6 KPMG International 4.0%7 Ernst & Young 3.8%8 Hewlett-Packard 3.1%9 Oakton* 3.0%

10 SMS Management & Technology* 2.7%11 Salmat 2.5%12 Deloitte 2.4%13 Fujitsu 1.4%14 Mincom 1.3%15 SAP 1.3%

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AnnuAl RepoRt 2010

• purpose • resolve • strength • fortitude

Determination knows no limits

ABN 65 067 682 928

UXC LimitedF

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AnnuAl RepoRt 2010 - ASX · 2010-11-04 · ANNUAL Repo R t 2010 AnnuAl RepoRt 2010 • purpose •...

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